A major change in the Indian economy
A major change in India has been the decrease in the primary sector and an increase in the manufacturing sector. Agriculture’s share of India’s national output has dropped from 40% in 1980 to 17% in 2010. For the first time, the primary sector is smaller than the secondary sector (manufacturing and construction). As a result, even more workers are leaving the land to work in the secondary sector.
There has been a large increase in investment in new plant and machinery in the manufacturing sector and much of this has been due to multi-national firms deciding to locate in India.
In April 2008, the Indian Government passed the National Rural Employment Guarantee Act. This promised those living in the rural areas at least 100 days’ work each year at a minimum wage. A local trade union leader stated that “people here are feeling a sense of security for the first time.”
A major problem for India, however, is inflation. The prices of many items have been rising significantly. The price of sugar, for example, rose by 35% in 2010. The Reserve Bank of India, the country’s central bank, has announced that it will need to change the rate of interest.