Deficit and Subsidies in the Indian Economy

Deficit has been known as an amount received is less than the money spent , more specifically a sum of money. Subsidies have been known as an amount of money that has been granted by a public or state body to keep prices of products and services as low as possible.

Deficit in Indian Economy: Deficit of government in India can be divided into three major types and these are Revenue deficit, Primary deficit and Fiscal deficit. Revenue deficit has been measured by differences between expenditures of total revenue and receipts of total revenue and thus has been known to only include current expenses and income. Primary deficit can be measured by the difference between fiscal deficit and interest which have been paid for previous loans and thus can be used to define the amount of money that the government of India is borrowing. A fiscal deficit signifies the difference between total expenditure and total receipts and this has also been seen to exclude borrowings.

Subsidies in Indian Economy: Major subsidies of India include Petroleum, Fertilizer, Food, Education and Export/Import subsidies. Fertilizer subsidies have been provided to farmers in order to reduce the cost of fertilizers. Food subsidies have been given to provide essential food to a segment of the population which have been living under the poverty line. Education subsidies have been given in order to help potential students to pursue higher education. Export/Import subsidies have been given in order to help organizations in acquiring advantageous positions in internationally competitive markets and it has also been seen to be helpful in developing domestic markets. Thus it can be said that deficit and subsidies in the Indian economy have been playing a crucial role in India’s development. It can further be said that deficits and subsidies in the Indian economy have also been helpful to different organizations and people.

Classification of the Indian Economy

Classification of the Indian economy can be seen of three types and these are Secondary economy, Primary economy and Tertiary economy. Also in terms of operation, it has been seen to be divided into two forms known as organized and unorganized. Secondary economy has been seen to be dependent on natural ingredients which can be used to produce products or services by different organizations. Transportation and Manufacturing can be examples of secondary economies. Primary economy concludes availability of natural resources in manufacturing goods and executing processes. Major example of this economy is the Agriculture segment. Tertiary economy has been acknowledged as having the largest share in GDP in India. Development of other two sectors has been seen to be dependent on this sector. Tertiary economy has also been known as the service sector as it can add value to products and services. Proper Classification of the Indian Economy has been seen to contribute towards GDP of India. These classifications have also been helpful in identifying proper economical structure of different industries.

Indian Economy: Definition

Depending on Indian Economy Definition, economy can be divided into two forms which are known as Capitalist form and Socialistic form. Capitalism has been known as an economic system in which production can be managed and owned by different private individuals. This economic form also includes no interference by the Indian government and thus has also been known as a free economy. Socialistic economy has been known as an economic system in which distribution and production can be owned and managed by state governments. This economic form has been known to provide equal opportunity and welfare to people of society. Apart from these two major forms, Indian Economy Definition can also include five characteristics of the Indian economy and these are Underdeveloped, Federal, Mixed, Dual character and Progressive character economies. Underdeveloped character defines low per capita income, poverty, unemployment, economic inequality, lack of technology and many other aspects of an underdeveloped economy. Governmental economic activities which have been seen to be operating at ground level can be defined by the federal economy. This characteristic of the economy is mainly administered by state governments. Mixed economy of India consists of both government and private sectors. This characteristic of the Indian economy has been acknowledged to be a unique economy that sets India apart from other countries. The Indian economy has characteristics of being both progressive and underdeveloped. Putting these two types of characteristics together, dual characters can be defined. Improvements of necessary industries, development in education and healthcare can be defined by progressive character economy. This characteristic of the Indian economy can help in defining economic systems of different organizations or governmental bodies of India.

Conclusion

This assignment has concluded different aspects of deficit and subsidies in the Indian economy. Definition of deficit and subsidies in the Indian economy has been concluded in this assignment. Classification of the Indian economy has also been concluded here. Definition and some characteristics of the Indian economy have also been concluded in this assignment.