The economy of India is the eleventh largest in the world by nominal GDP and the third largest by purchasing power parity (PPP).The country is one of the G-20 major economies and a member of BRICS. After the independence-era Indian economy (before and a little after 1947) was inspired by the Soviet model of economic development, with a large public sector, high import duties combined with interventionist policies, leading to massive inefficiencies and widespread corruption. However, later on India adopted free market principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V.Narasimha Rao the then Prime Minister who eliminated License Raj a pre- and post-British Era mechanism of strict government control on setting up new industry. Following these strong economic reforms and a strong focus on developing national infrastructure such as the Golden Quadrilateral project by Atal Bihari Vajpayee the then Prime Minister the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people. It’s one of the fastest-growing economies in the world. BRICS
BRICS is the title of an association of leading emerging economies, arising out of the inclusion of South Africa into the BRIC group in 2010. As of 2012, the group's five members are Brazil, Russia, India, China and South Africa. With the possible exception of Russia, the BRICS members are all developing countries, but they are distinguished by their large, fast-growing economies. MICRO ECONOMICS & MACRO ECONOMICS
Microeconomics studies economic behavior of individual economic entities and individual economic variables. The economic entities may be individuals or small group of individuals. It is the study of individual economic units such as individual firms and households, individual prices, wages, income, individual industries and individual commodities.
Macroeconomics is concerned with the nature, relationships and behavior of such aggregate quantities and averages as national income, total consumption, savings and investment, total employment, general price level, aggregate expenditure and aggregate supply of goods and services. As macroeconomics deals with aggregate quantities of the economy as a whole, it is also called as aggregative economics. Microeconomics seeks to explain how an individual consumer distributes his disposable income among various goods and services. How he attains the level of maximum satisfaction and how he reaches the point of equilibrium. Microeconomics is also concerned with how individual firms decide `what to produce‘, `how to produce‘, and `at what cost to produce ‘to minimize the cost of production. To be specific, theory of consumer‘s behavior, theory of firms or theory of production, theory of product pricing, theory of factor pricing ( or distribution theory )and the theory of economic welfare constitute the body of microeconomics. Theories of National Income, consumption, saving and investment, theory of employment, theories of economic growth, business cycles and stabilization policies, theories of money supply and demand and theory of foreign trade broadly constitute the subject matter of macroeconomics. Macroeconomic theories seek to answer questions such as how is the level of National Income of a country determined? What determines the levels of overall economic activities in a country? What determines the level of total employment? How is the general level of price determined? Etc…
Circular Flow of Money
Income (Y) in an economy flows from one part to another whenever a transaction takes place. New spending (C) generates new income (Y), which generates further new spending (C), and further new income (Y), and so on. Spending and income continue to circulate around the macro economy in what is referred to...