Institutional Set-up of Indian Economy

Our economy was producing agricultural goods since long and now production is being done on a much larger scale and is becoming more complex. Thus, modern economy not only produces goods from agriculture and industry but also produces services like transport, banking, insurance, communication, storage of goods etc. Thus, the aggregate of goods and services produced by the individual producers and entrepreneurs in an economy at any particular time is known as domestic product of the economy. This concept of domestic product is of two types—Gross Domestic Product (GDP) and Net Domestic Product (NDP). In the same manner Gross National Product (GNP) and Net National Product (NNP) concepts are also stated in this regard.

Institutional set up is a system where the production and distribution processes are owned and controlled by private sector or public sector. Indian economy has dualism. But Indian economy is an under-developed economy leaning towards economic development.

However, on the basis of ownership, the economy is divided into two sectors—Private Sector and Public Sector. On the basis of occupation, economy can be classified as under—Primary Sector, Secondary
Sector and Tertiary Sector. Besides, we also find rural sector and urban sector in all types of economy. But there is no line of demarcation among all sectors. All these are closely related. Private and public sectors are two aspects of an economy and cannot be separated. Similarly, primary, secondary and tertiary sectors are also dependent on each other. Thus, economic prosperity of a country depends upon the development of all these sectors. So, these sectors must be developed by all means.
The population situation in India is very grave as our population in the world is next to China. It means there is “population explosion” in India which has retarded our economic development in many ways.

Indian economy is also suffering from many problems besides population explosion and these are poverty unemployment, rise in prices and  inflation etc. These problems are a curse for the nation and government is doing a lot of work to solve all these problems.


Every country has adopted certain institutions by which the process of production and distribution is carried on.  In certain countries, there is a complete ownership or control of economic institutions in the hands of private groups or individuals and there production is done for profit motive or individual gain. These’ countries are completely capitalist countries like America, England etc. In some other, these institutions are controlled and owned by the State and it is expected that the production process may be carried on in the public interest. These countries are completely socialist countries like Russia, China etc. There are certain other countries where production process is carried by both the State and the private sector e.g. India, Pakistan, Ceylon etc. In a way it is a capitalistic democracy where efforts are made to achieve certain welfare objectives of socialism. Thus it is clear that institutional set-up is a system where the production and distribution process are owned and controlled by (a) private sector (such as small and large productive enterprises and business houses) or (b) public sector (i.e., the government bodies, the banks, insurance companies and similar financial institutions providing productive services or the central government, the state government, the Reserve Bank of India and so on) or (c) joint (private and public) sector.

Thus, Institutional set-up is comprised of (a) Productive enterprises and Business Houses (b) Financial Institutions and (c) Government Agencies.
In India, certain institutions are completely in the hands of the private sector. These institutions are run purely with a private interest but the government can have their social control under various provisions of the law through regulation and direction. There are also certain institutions in our economy which are represented by both the public and private sectors from the point of view of ownership and control. There are other institutions which are solely run by state or the public sector. The characteristic of our mixed economy is such here that public sector, like private sector, also does the production activity with a profit motive as certain government industries, generation of electricity etc. But here the main objective of the public sector is social welfare, social justice and balanced regional growth and not purely profit motive.

Price Mechanism and Planning

There are two ways of solving the basic problems. These are price mechanism and planning : Price mechanism refers to the system in which price is determined by the forces of demand and supply without any external interference which, where, how much goods and services are to be produced. Economic planning refers to the deliberate and conscious control of the economy by the central planning authority in order to achieve the laid down targets and objectives within a stipulated period of time.

The capitalist economy is governed by the price-mechanism and under price mechanism or market mechanism prices are determined by the interaction of demand and supply. In other words, prices are governed on the basis of people’s demand and producers’ supply of goods at different prices. If at a given price, the demand for a product is more than its supply, this will result in the rise of the price, which will result in a fall in demand on one side and rise in supply on the other. Thus a point or a price comes where both demand and supply are equal to each other. When neither demand nor supply exceeds in the market, it is said that economy has solved its basic problems i.e. what to produce and how much to produce in a more or less satisfactory way. It is generally believed that when price mechanism starts functioning effectively and efficiently; it can help in solving all other basic problems which includes fair and just distribution also.

In a socialist economy, the basic problems are solved by economic planning. However, in a mixed economy both price mechanism and economic planning are pressed into service in order to solve the basic problems. But certain persons feel that as compared to economic planning, the price mechanism does not solve the basic problems. They argue that in under-developed economies these forces help a little in achieving the required pace of economic development and also do not provide social justice for all in the fair distribution of national product. Thus price mechanism is an inadequate force so far as the solution of basic problems of all economies are concerned. In this regard following three reasons are given

(1) Economic needs of the people not represented equally: The first argument given is that forces of market demand and supply do not cover up economic requirements of the people equally, as the voting by ballots covers up the political requirements in a democracy. It is observed that market demand generally goes in favour of those persons who possess the capacity to spend more on their purchases. Thus, as compared to poor man’s necessity the rich man’s luxury snatches a greater portion of the resources of the economy. For example, the production of a private car is more profitable than the production of a public bus, even though the bus serves the transport needs of bulk of the people. Same are the cases of production of air conditioners, carpets, costly sarees etc. as compared to the production of table fans, durrees, dhotis etc. respectively.

Similarly, from the point of view of the supply, the poor need medicines whereas the rich lay more emphasis on the demand of cosmetics. The poor person requires hospitals whereas the private investor considers construction of a cinema house as profitable. Thus the choice fluctuates between cosmetics and medicines, big buildings and small huts, cinema houses and hospitals, big five star hotels and small dhabas, so far as the allocation of resources for production is concerned. Thus, the scale of supply goes to satisfy the needs of those persons who are economically stronger and financially sound because the allocation of resources through market mechanism does not work according to the rule of ‘one person one vote’ Therefore the price-mechanism generally favours the larger investor or the spender

(2) Self-interest: The market-mechanism takes into consideration only the self-interest and not the social interest Every buyer or seller is motivated by the self-interest during the transaction or exchange of goods For example, a cigarette producer, while producing cigarette, sees how he can earn maximum profit from its sale, though from the social point of view its production and sale is injurious to health. Similarly, the business community wishes that certain goods may be taxed less so that they may earn a maximum revenue, but the social interest desires that certain goods must be taxed heavily so that state may earn a revenue and may spend the same for the welfare of the people.

(3) Infrastructure: The market forces of demand and supply, to a greater extent, are insufficient so far as the question of the development of infrastructure is concerned. Infrastructure includes construction of roads, railways, bridges, facilities of irrigation, drinking water, generation of electricity, construction of dams; flood control; facilities of communication and such other social and economic services. These basic structures cannot be built rapidly through the market mechanism alone because these require huge expenditure which cannot be incurred by the private sector The reason is that this structure is not profitable Huge projects like construction of dam requires thousands of crores of investment, but the return from it is after a very long time and that too is not sure Thus, none will come forward to risk his money. Thus, if left to market-mechanism, these basic structures will remain in an under-developed stage. Take the case of India, all these infrastructures were taken up by the government and spent crores of rupees for their development during the five-year plans.

Thus, from the point of view of an under-development economy, planning mechanism has also to be taken into account so that the objectives of rapid economic development and social justice may be obtained. But it is generally observed that the public sector as compared to private sector, generally becomes inefficient as it does not deliver goods efficiently as the private sector does. It has been noticed that government-run industries have been suffering losses while the similar industries run by the private entrepreneurs are earning profits. Thus, in our opinion, the solution lies in the mixture of both the price- mechanism and planning-mechanism. India has adopted mixed economy where both price mechanism and planning mechanism are working.

Factors Determining Allocation of Resources and Decision Making

Our wants are unlimited and means are limited as a result of it problem of choice arises. This problem can be solved by allocating the resources more efficiently. In this regard there is a problem of decision making before individual, the market and the state. Individual and the market have to decide in the determination of allocation of resources that what to .produce, for whom to produce, at what price and where to sale the goods. In this way the state has to decide that whether resurgences may be utilised for reducing poverty, price rise, unemployment or for the development of Agriculture, Industry and Trade.

There are certain important questions for which we have to find answers. These questions are related to the economic life of the people living in an economy. But the question is as to how one can define the economic life of the people. This is a broad question and can be answered indirectly by discussing some other questions first. These questions are, in a way, related to our economy and our economic life and some of the same are as under:
1. Who are the producers in the economy?
2. For whom does the producers produce ? Or, who are the consumers?
3. How does the producer decide which goods to produce and in what quantities?
4. How does the producer choose the correct combination of different resources of production) that are needed for producing a good?

All the four questions are clearly related to economic activities of production and consumption.
There is another basic question, connected with the questions of production and consumption, in a developing economy.
5. What is the meaning of Economic Development and how does an economy develop?
Then an associated question is
6. What is the cost that we have to bear for economic development? In other words, what sacrifices must people make today for prosperity tomorrow?
We shall discuss these questions in detail in the sections ahead. But two things have to be kept in mind about them t’i.
(a) We can expect to offer a solution to the problems of Indian economy only when we know, along with answers to these questions, a number of basic facts, about our economy such as our natural and physical resources, our huthan resources, the available skills and the state of our agriculture and industrial technology, and about institutions such as the business enterprises, banks, farms, government bodies etc.
(b) All the basic questions are interrelated and interdependent. None can be answered without thinking of the others at the same time. For example, which commodity is to be produced and who will consume that what has already been produced in the economy, are not two separate questions. In the same way if we produce more machines today rather than more sugar, it implies that we have enhanced the capability for producing goods tomorrow but only by reducing the consumption of same goods today. Therefore, the two questions viz. ‘what is the cost that we have to bear for economic development’ and ‘what goods will be produced today’? are not separate but interlinked questions.
The moment we start realising how all the important economic questions pertaining to production and consumption are interlinked, we shall start understanding the complexity of the economic life of the people as a whole. Here it may be mentioned how exactly interdependence of production, consumption and economic development proceeds, is related to an advanced study of economic analysis. In the present study we will simply discuss the salient features of these interlinked economic processes as they function in the context of the Indian economy.

Who are the Producers?

The persons or the institutions which conduct production activities are known as producers. There are the following three types of producers in the economy:
(a) Primary Producers : In it we include those producers who produce food and other crops, forest products etc. All these goods are known as products of nature. From the historical point of view those
the persons who initiated the productive activities consisting of agriculture, cattle-raising, poultry farming, forestry, stone quarrying, mining etc.
(b) Secondary Producers : In it are included those producers who are engaged in the manufacture goods which are being produced by small and large scale industries such as steel, sugar, cotton s, cement etc. Their goods are known as man-made goods and are different from the primary products or products of nature.
(c) Tertiary Producers : This kind of producers are those who provide services like transport by road, rail or ship, storage of goods, banking and insurance and so on. In this third kind of productive activity bides primary production like agriculture and secondary production like industry, it is necessary that such people may emerge who besides providing physical goods may also provide essential services to the economy. Thus in the present structure the production of both goods and services are essential and sensible as compared to production of physical goods only.

Thus, it is advantageous to divide the entire economy into three parts or sectors according to three kinds of productive activities z. the primary sector comprising economic activity like agriculture, the secondary sector comprising industry and the tertiary sector comprising services.

For whom does the Producer produce? or Who are the Consumers?

Early history shows that the first producers produced only for themselves and their families. Whatever ‘goods’ they produced were for their own use just as food to eat, clothes to wear, houses for living etc. With the passage of time, the people realised the importance of exchange of one anothers products. Each man and woman got specialisation in the production of the respective goods and in a way felt the need of one anothers products for consumption. Thus the weaver produced cloth only, potter utensils, carpenter wooden goods and the cultivator wheat or paddy only and they used to exchange their surplus output and meet the daily requirements so that all could eat wheat or rice, wear clothes, use utensils etc.

The process of exchange in the beginning was barter which means exchanging product for a product such as wheat for rice, rice for cloth, cloth for utensils and so on. This process continued till the use of money was discovered by man. The moment money came into use all these producers started selling their goods and services and exchanged for money. Now the producers were called as sellers and the consumers as buyers with the use of money coming into existence. And the place was known as market where they used to go to sell (or ‘supply’) their surplus product for money and with their money to buy (or ‘demand’) goods.
Thus, we see today that the producers produce and thus supply their products or services for the consumers who have a demand for these in the market. However, it should be clear that producers-are not only the suppliers but in a way they are also the consumers, not only of their own goods but also the goods produced by other people. For example, the cultivator not only supplies and sells rice but also uses rice for himself along with other products such as gur, milk, clothes, utensils, ornaments produced by others.

In short, it can be said that producers produce goods or services for the consumers and in modern times it implies that production is done to sell it in the market for getting money.

What to Produce and in What Quantities?

This question is related to the consideration of demand and supply, as it is the demand and supply being the deciding factor which has to be kept in mind by every producer regarding what to produce and in what quantities. With the availability of limited means of production a producer will choose the production of those goods only which are most profitable to him i.e. he will keep in mind the profit aspect of the goods which he decides to produce in a certain quantity This can be clear from a simple example.
Suppose a farmer owns one acre of a fertile land. He can use it either in the production of wheat or sugarcane. While cultivating the land certainly he will have to spend a certain amount of money known as cost and this cost will not be the same for both these products but will be different. Further if we assume that he does not require this land for his self-consumption but wants to sell the output from it in the market. Then the price which he will get from the sale of wheat or sugarcane will not be same but different. The profit of the farmer can be assessed by the difference between what price he gets for his output from the market and his own cost of production ie. his profit (I’) will be equal to the difference between value of the produce (Vp) and cost (Cp) incurred on the produce.

It is upto the farmer whether he produces wheat or sugarcane on his acre of land. He can also change its output by altering his cost of production. Suppose his output of wheat increases with spending more on fertilizers, irrigation etc. Then not only the value of his output will increase but also the cost of production. He will like to choose that cost which brings him the maximum profit from the production of wheat or sugarcane from that acre of land.

In short, the producer, from his available resources, will try to produce really those goods which are most profitable to produce. He can thus choose the goods to be produced along with their quantity. We may again repeat that for the producers, profit is given by what his output brings in market from the forces of consumers’ demand for it minus what it costs him to supply that output. The first is related to demand and second is related to supply, both these considerations decide what to produce and how much to produce.

How to Produce?

This question is related to the technique which can be applied for production. Naturally the producer will apply that technique which gives him maximum production at a minimum cost. The problem is to choose the technique. Although it is assumed that the producer has the knowledge of the actual process of production yet generally he has to decide as to how he will combine the different resources (from the given resources) necessary for the purpose of production. This is required because it is possible to produce the sante output by utilising different alternative combinations of resources such as labour, land, equipment, fertilizers etc. In other words the producer will choose that combination of resources of factors of production.which gives him the minimum or least cost for a particular output. Thus as we have said earlier, the answer to the question ‘How to produce lies in the maximum production at the least cost.

Efficient Use of Resources

This refers to that situation where a producer may earn maximum profit by using the resources most efficiently and judiciously and this maximum profit cannot be increased more by changing the product to be produced, the quantity to be produced or the costs incurred on the resources used in production. On the basis of efficient use of resources the producer is in a position to answer the questions viz. “What to produce and in what quantities and at the same time how to produce.” On the given conditions of demand and supply he can maximize his profit if he chooses the correct combinations of the available resources. We can thus say that the use of the resources is economically efficient, the moment producer gets his answer right. In short the attainment of maximum profit is the result of efficient use of resources.

Types of an Economy

Economy is of various types. Smallest type of economy is a Household Economy, where a few members satisfy family wants by earning something. Many a time an economy is divided into Village economy, Town economy, Regional economy, National economy and whole world or International economy. Generally, the economy is classified on the basis of ownership and level of development.

(a) On the basis of ownership. An economy is of three types viz. (i) Capitalist economy, (ii) Socialist economy, and (iii) Mixed economy.

(b) On the basis of level of development. An economy is of two types viz. (i) Developed economy, and (ii) Underdeveloped economy.

Capitalist Economy

A capitalist economy is an economy in which all the economic activities are regulated and controlled by market conditions without any outside interference. In other words, a capitalist economy is a system where there is a private ownership of factors of production. Production is done with a view to earn profit. In such an economy what, how much and where to produce depend on price mechanism. Thus, the people in such an economy have ftll economic freedom as producers, sellers, buyers, employees, employers, owners and consumers. Capitalist Economy is also known as Free Enterprise Economy, Free Market Economy etc.

According to Prof. McConnell, “A capitalist economy may be characterized as an automatic self-regulating system motivated by the self-interest of individual and regulated by competition.”

Socialist Economy

Socialist economy is an economy which is owned and controlled by the government. Here all the economic resources of the country are owned by the government and these are used in the public interest. All the like what to produce, how much to produce, how to produce etc. are taken by the Government in view the public interest. Economic activities are controlled and managed by a Central Planning Authority. Income is also distributed among individuals on the basis of their needs and efficiency. Thus, Socialist economy is a kind of system under which economic system of the country is controlled and regulated by the Government so as to ensure welfare and equality of opportunity to the people in a society.
According to Samuelson, “Socialism refers to the Government ownership of the means of production, planning by the Government and income redistribution.”

Mixed Economy

It is a mixture of the characteristics of capitalist and socialist economies. In this economy, like capitalist economy, certain economic activities are fully owned and controlled by private enterprise and rest of the economic activities, like socialist economy, are controlled by the Government. Mixed economy is a golden mean between two opposite ideologies. It is a coordination and mixture of the merits of both the economies, setting aside their demerits. Thus Mixed Economy is that economy in which private ant/public sectors co-exist and coordinate for achieving a common economic objective.
According to Samuelson, “Mixed economy is an economy in which both public and private institutions exercice economic control”

Developed Economy

It is an economy where the pace of economic growth is at its maximum, national and per capita income is very high and country has reached the tertiary stage after crossing primary and secondary stages. The standard of living in such an economy is very high. Generally, the word ‘economic growth’ is used for a developed economy. The economies of the countries like America, England, Germany, Japan, Canada, France etc. are developed economies.

Under-Developed Economy
Under-developed or developing economy is that where there is no full or maximum use of available resources due to vicious circle of poverty. Per capita income is less and standard of living of the people z low, In other words, this is that economy where (a) per capita real income is lower than in developed countries, (b) human’ and natural resources are not fully utilized, (c) production technique is inefficient and traditional and (d) there is desire for economic development. But as the country goes on developing, the modern industrial sector, though small, keeps increasing in size and the traditional agricultural or rural sector keeps shrinking.

According to Prof. M.P. Todaro, “Under-developed economy is that economy in which there are low level of living, absolute poverty, low per capita income, low consumption levels, poor health services, high death rate, high birth rate and dependence on foreign economies. “The under-developed economies in the world are Pakistan, Indonesia, Ceylon, Bangladesh etc.

Meaning and Functions of Economy

With the growth of civilization man’s needs have undergone an increase. The availability of goods and services for fulfilling these increasing needs could have been possible with the mutual co-operation of the persons. The people started doing various types of activities to fulfill their needs through mutual co-operation, like one person started the production of cloth and the other of foodgrains. Similarly, different persons started producing different goods. Certain persons like doctors, lawyers, teachers etc. started offering their services and consumption for satisfaction of wants could have been possible with the help of an organisation or institution. This organisation is known as economy. In the ordinary language, the word ‘economy’ refers to frugality, but in economics this word is not used in the sense of frugality It is referred to that organisation which provides living to common people in a set region under one political set up.


According to Advanced Leaweic Dictionary. “Economy means control and management of the money, goods and other resources of a community or society” Every person in the society is engaged in earning his. livelihood by performing various types of activities. Some are doing service, some are running shop, some are teaching, some sell tea, some .are pulling rickshaw, while others are driving a three-wheeler r a taxi. All this working force produces goods and services while working at their place of work and get remuneration for their work rendered. All those activities which are remunerated are called economic activities. Thus different people, in a country, are engaged in different economic activities to earn theirs living and thus satisfy their wants. In a way all persons, in an economy, are earning their living and thus satisfying their wants either by working as teachers, lawyers, singers, doctors, dancers and thus providing services to the nation. Such an economy can be a family, village, town, district, state, country or the whole world. Thus, economy is the sum total of all economic activities of the society. In other words, economy is a system of production, consumption, investment and exchange for making a living.
In the words of A.J. Brown, “An economy is a system by which people get a living and satisfy their wants.” According to J.R. Hicks, “An economy is a co-operation of producers to satisfy the wants of consumers; on the other hand, remembering that the producers and consumers are largely the same people, we can look upon it as, a system of mutual exchanges.”


Production, consumption, exchange, distribution, investment and saving are the vital processes of an economy.
(1) Production. It refers to the creation of utility in such a way that there may be an increase in the value of the commodity Utility is the want satisfying power of a commodity. There are various forms by which utility can be created in a commodity namely (a) by changing the form, (b) by changing the place, (c) by changing the time, (d) by increasing knowledge and (e) by service. The main factors of production are land, labour, capital and enterprise.
(2) Consumption. It is the direct use of the utility of a good or service for the satisfaction of human wants e.g. eating food, wearing clothes, getting medicine from a doctor etc.
(3) Exchange. In it we study the exchange of goods and services, how prices are determined. What is market? What is trade? Goods and services are exchanged with the help of money.
(4) Distribution. It is an economic activity related to the distribution of reward among various
(5) Investment. Increment incurred in capital is investment. That portion of income which is not spent on consumption but is used for capital formation for nation after saving is known as investment. 1= Y— C = S. Here I = Investment, Y = Income, C = Consumption and S = Savings. Machines, tools, raw material, railways, roads, factories are examples of investment where capital has been invested.
(6) Savings. It is the difference between consumption expenditure (C) and income. S = Y – C. In every country investment depends on savings, more the savings more will be the investment.
(7) Economic Growth. The main objective of an economy is economic development. Economic development brings an increase in income and output. The constant rise in national income and its equitable distribution is most necessary. Economic development depends on capital formation, right use of natural resources, efficiency of labour, growth of agriculture and industry.

In short, it can be said that production, consumption, distribution, investment, saving and economic development are the main economic activities of an economy. The smooth and collective direction of these activities are the essentials of an economy.

Concept of Economic Development


The issues related to Economic Development and growth caught the attention of economists mostly after two world wars, when it was realised that stable global peace is not possible unless majority of countries enjoy comparable economic prosperity and have therefore, equal power. Economic development is of utmost significance to all economies. The term Economic Development and Economic Growth are used interchangeably. But economists make distinction between these two terms. Economic development is something more than economic growth. Economic development means growth with change and increase in welfare. Economic development, economic growth and sustainable development concepts are necessary for understanding the concept of economic development.

The term Economic Development has been defined differently by different economists.

In the words of Meier and Baldwin, “Economic development is a process where in an economy’s real national income increases over a long period of time. And if the rate of development is greater than the rate of population growth, then per capita real income will increase.”

According to Colin Clark, “Economic development is simply an increase in economic welfare.”

Thus, Economic development is that process by which per capita income and economic welfare of the country increases over a period of time.

Features of Developed Economies

The main features of the developed economies are as follows : (1) High per capita real income, (2) High rate of growth, (3) Developed human capital, (4) Low growth rate of population, (5) High standard of living, (6) Advanced technique of production, (7) Wider size of market, (8) Growth-oriented economic agencies, (9) Advanced foreign trade, (10) Developed natural resources.

The word growth, oftenly used as a synonym of the term development, but they have different implications. Economic growth refers to quantitative changes. Economic growth means increase in ieal income or output as well as per capita income.
In the words of Paul Baran, “Let economic growth be defined as increase over time in per capita output of material goods. “According to McConnell, “Economic growth may be defined as an increase in the economy’s gross national product or real national income.”

Growth and Development

The main difference between Economic growth and Economic development is as follows:

(1) Economic growth refers to the long-term increase in real per capita income while Economic development refers to the long-term increase in real per capita income and economic welfare.

(2) Economic growth is related to the problems of developed economies while Economic development is related to the problems of underdeveloped economies.

(3) Economic growth is a quantitative term while Economic development is a qualitative term.

(4) Economic growth ignores distribution of income while Economic development does not ignore the distribution of income.


The word ‘sustainable’ means something which is not short lived but can continue in future also. Sustainable development is that process which satisfies the needs of present generation without causing any trouble to the efficiency of the future generation to meet their own needs.
In the words of Mahbub ul Haq, “It is the sustainability of human opportunities that must lie at the centre of our concern.”

Features of Sustainable Development
The main features of sustainable development are as follows: (1) Pollution not Increase, (2) No Limit on Development, (3) Efficient Use of Natural Resources, (4) Quality of Life of the Future Generation not Reduced.

Conditions of Sustainable Development
The main conditions of sustainable development are as follows: (1) Comprehensive Development of the Rural Sector, (2) Economic Development, (3) No Degradation of Natural Capital Stock, (4) Reduction in Industrial and Agricultural Pollution.

 Significance of Sustainable Development
The main points of significance of sustainable development are as follows:
(1) Raising the Standard of Living
(2) No Loss to the Living Standard of the Future Generation
(3) Improvement in the Quality of Life and Health
(4) Environment Conservation.

Major Industries in India

The spatial distribution of industries can also be studied with respect to major industries with the aim of explaining the advantages they enjoy and lines of movement of raw materials and manufactured goods.


It is chiefly mineral-based industry and is the basis of modern industrialisation. India is today world’s fifth largest producer of iron, order up from 7th position few years back. Iron and steel is the foundation of modern machines, tools, transportation (rail, road, water, air). It is used in making super structures, bridges, tanks, agricultural implements and many products of daily use. Therefore, it is called a basic industry or key industry. It has great strength, toughness, elasticity and low cost of production. The production and consumption of steel is the index of the economic development of a country. Ours is truly an ‘age of steel.’
A modest beginning of the industry was made at Kulti (West Bengal) in 1870. The first modern steel plant was established in 1907 at Sakchi (Jamshedpur) in Jharkhand by Jamshedji Tata. India produces the cheapest steel in the world. India has large reserves of high grade iron ore, coking coal and limestone. These raw materials are found close to each other. India produces 226 lakh tonnes of steel. With the establishment of new steel plants, it is expected to reach 250 lakh tonnes of steel. All the steel plants except Jamshedpur are in public sector.

Centres of Production
a) Damodar Valley. This region has TISCO (Tata Iron and Steel Company) steel plant at Jamshedpur (Jharkhand) and IISCO (Indian Iron and Steel Company) steel plant at Kulti-Burnpul Chota Nagpur plateau (including West Bengal, Bihar, Orissa, Jharkhand, Chhattisgarh .and M.P.) is the natural core of this industry.

Geographical Factors for location:
(i) Availability of iron ore from Singhbhum region, (ii) Coking coal from Jharia and Raniganj, (iii) Limestone, manganese and quartz are available nearby, (iv) Damodar, Subamrekha, Kharkai provide water and sand, (v) Cheap labour from densely populated states of Bihar and West Bengal, (vi) Facilities of cheap transport, and port of Kolkata.

b) Visvesvaraya Iron and Steel Limited. This steel plant is located at Bhadravati (Karnataka). It produces alloy and special steel. Iron ore is obtained from Babu Budan Hills, charcoal from Kadur forests; water power from Jog falls; limestone from Bhandigudda mines.

c) Steel Centres in Public Sector. Four steel plants have been developed in the public sector, under HSL (Hindustan Steel Limited) with the collaboration of some foreign countries.
(i) Bhilai (Chhattisgarh)—With the help of Russia.
(ii) Rourkela (Orissa)—By German firm Krupps Demag.
(iii) Durgapur (W. Bengal)—With British aid.
(iv) Bokaro (Jharkhand)—With the help of Russia.
Geographical Factors for Location:
(i) Bhilai gets iron ore from DhaI/i Ra/hara hills, coal from Korba and Jharia coal fields; Manganese from Ba/ag/rat ranges and limestone from Nana’ani mines.

(ii) Durgapur gets iron ore from Sing/thhum; coal from RanrçwnJ limestone from Gangpur and water from D.VC
(iii) Rourkela gets iron from Bonaz. coal from Jharzi and Ranianf limestone from Binmirapin:
(iv) Bokaro, an ore based steel plant gets coal from Jhan, iron from KeonjZiar and water power from

d) New Steel Plants. The government has set up new steel plants at:
(i) Vishakhapatham (Andhra Pradesh)
(ii) Salem (Tamil Nadu)
(iii) Vijaynagar, (near Hospet, Kamataka).

The capacity of the different steel plants is being expanded. The production of pig iron and steel is being increased by setting up new industries, mini plants based on scrap iron. At present there are 200 mini steel plants in India producing 8.5 million tonnes of steel. India exports about 10 lakh tonnes of steel every year. In 1973, SAIL (Steel Authority of India Limited) has been established for the better management of these steel plants.


India has taken a giant leap forward in production of cotton by introducing a new variety of hybrid cotton. Cotton textile industry is one of the oldest industries in India as old as Indus valley civilisation. it was a simple cottage industry Spinning and weaving were the earliest crafts of primitive man. The industry owes its rapid development due to Industrial revolution. The first modern cotton mill was set up at Fort Gloster (Kolkata) in 1818. The real first cotton mill was established in 1854 in Mumbai. A large home market, manufacturing of textile machinery and abundant supply of cotton have led to the growth of this industry in India. There are about 1719 textile mills scattered over 80 towns and the annual production of cloth is about 3740 crore metres. 188 mills are in public sector, 146 mills in the corporation sector and 1235 mills in the private sector. India is the second largest producer of cotton textile in the world. The number of composite units is 378 while spinning mills are 770. The per capita availability of cloth is 30 metres.

Distribution of Cotton Textile Industry:

(i) Maharashtra. Muinbai is the oldest centre of cotton textile industry in India. Mumbai is known as “Cotton polis of India”. Nagpur, Pune, Sholapur, Amaravati are other centres. The following factors have led to the concentration of this industry at Mumbai:
(1) Early start (2) Large amount of capital (3) Long staple cotton from Gujarat and Maharashtra (4) Facilities of Mumbai as a port (5) Easy import of machinery (6) Humid climate (7) Cheap labour (8) Water power from Tata Hydro-electric works (9) Large ready market (10) Opening of Suez Canal route.
(II) Gujarat. Ahmedabad is the largest producer of cotton textiles in India. It is known as the “Manchester of India”.
Ahmedabad is situated in the heart of cotton growing area. Cheap land is also available.
(iii) Tamil Nadu. The development of hydro-electricity in the south and cultivation of long staple cotton led to the location of this industry in Southern India. Madurai, Coimbatore, Salem and Chennai are main centres.
(iv) West Bengal. Most of the mills are located at Koilcata in the Hooghly basin.
(v) Uttar Pradesh. Kanpur is the main centre and is called the “Manchester of Northern India”.
(vi) The dispersal of this industry has led to the growth of new centres like Bhopal, Gwalior, Bangalore, Phagwara, Bhiwani, Dethi and Kota.
Importance. (i) Cotton textiles is the oldest and the biggest industry in India. (ii) About 64 million workers are engaged in this industry. (iii) It has the largest amount of capital (Rs. 1300 crore) invested. (iv) It earns about a sum of Rs. 20,000 crore as foreign exchange by export of manufactured goods. (v) Many industries such as dyes, chemicals depend on cotton products.


Sugar is an important article of food. It has a universal demand. Sugar is one of the major agro-based industries of India. India is regarded as the birth place of sugarcane and sugar.

Importance. (i) India is the largest producer of suga in the world. (ii) It is the second largest industry of India with capital of Rs. 1000 crore. (iii) About 3 lakh workers are engaged in this industry. (iv) About two crore farmers depend upon this industry. (v) India exports about 5 lakh tonnes of sugar every year. (vi) Many industries such as alcohol, paper, wax, fertilizers, cattle feed are based on byproducts.

India is one of the oldest producers of sugarcane in the world. The home industry was granted protection in 1932. Since then, the industry has rapidly developed. There are about 460 sugar mills producing about 150 lakh metric tonnes of sugar. North India (U.P. and Bihar) produces about 60% of sugar in India.

Shifting of Sugar Industry to Southern India. U.P. is the largest producer of sugar in India despite the fact that ideal conditions for sugarcane are found in uthem India. But recently the industry is shifting towards the states of Maharashtra, Tamil Nadu and Andhra Pradesh in Peninsular India.

(i) The yield per hectare of sugarcane is high in southern India. (ii) The sucrose content in sugarcane is high in southern India as compared to that in northern India. (iii) The southern states have installed new mills, where productivity is high and cost of production is low. (iv) Climatic conditions are ideal in southern states. (v) The co-operative movement has helped to install new mills in these areas.
(i) Availability of sugarcane in Northern India. (ii) Cheap and skilled labour. (iii) Large demand. (iv) Availability of coal. (v) Cheap transport.

Main centres:

(1) U.P. Saharanpur, Muzaffarnagar, Meerut, Gorakhpur, Sitapur, Bareilly.
(2) Biliar. Champaran, Patna.
(3) Maharashtra. Abmednagar, Sholapur.
(4) Andhra Pradesh. Hyderabad.
(5) Punjab. Amritsar, Bhogpur, Phagwara, Batala, Nawanshahr.
(6) Ratlam (M.P.), Rohtak (Haryana), Madurai (Tamil Nadu).

Problems. Sugar industry is facing some problems. Yield of sugarcane is low. Sugar content is low. It is a seasonal industry. There is absence of industries consuming by-products of sugarcane. Cost of sugar is high.


In ancient period leaves and stones were used for writing. The word paper is derived from a plant called Papyrus. Paper making was invented in China in about 105 A.D. Later on paper making machines were invented in European countries. Machine made paper was first manufactured in India in 1870.

Importance. Paper is the basis of modem civilization. There is a great consumption of paper in developed countries. Paper is required for note books, magazines, books, newspapers etc. Different types of paper such as wrapping paper, art paper, bank paper, card board, news-print, duplicating paper etc. are manufactured. Different types of raw materials such as cotton, rags, wood pulp, bamboo, Sabai-Bhabar grass, waste of cotton, jute, bagasse are used for paper making.
‘PIie first paper mill was established in India in 1870 on the Hooghly river near Kolkata. At present there are 380 paper mifis in India, producing about 40 lakh tOnnes of paper annually. In India, prothiction of wood pulp is low.

Main centres
1. West Bengal. West Bengal is the largest producer of paper in India. The main centres are Titagarh, Raniganj, Naihati and Kolkata. This region has many favourable conditions.
(i) Bamboo is available from Sunderban Delta and Assam.
(ii) Grass comes from Bihar.
(iii) Coal from Jharia and Raniganj.
(iv) Large market due to dense population.
(v) Clean and soft water from Hooghly river.
(vi) Cheap transport.
2. Uttar Pradesh. Paper mills are found at Saharanpur, Meerut, Lucknow and Kanpur.
3. Madhya Pradesh. There is a newsprint mill at Nepa Nagar in M.P.

4. Ootakumund has a mill for the production of X-ray roll, and films and photo paper.

5. Other centres are Brajraj Nagar (Orissa), Dalmia Nagar (Bihar), Bangalore (Karnataka), Pune, Ballarpur (Maharashtra), Jagadhri (Haryana), Bhopal (Madhya Pradesh), Mukerian (Punjab).

The first jute mill was set up in india at Rishra near Kolkata in 1859. Thereafter, being an export- oriented industry, it made rapid progress. At the time of the partition of the country in 1947 most of the mills remained in India but three-fourths of the jute growing area went to East Pakistan, now Bangladesh. In 1997-98, there were 66 jute mills which produced 13,94,000 tonnes of jute goods and employed 25,000 workers. In the same year we exported 2,90,000 tonnes of jute goods which fetched us foreign exchange worth rupees 244 crore. The exports are decreasing due to a number of factors like declining demand for jute bags, high cost of manufactured goods, stiff competition in the export market and competition from synthetic substitutes both in the foreign market as well as in the home market. Centres of jute industry are Kolkata, Patha and Guwahati.


Woollen textile industry is located at Amritsar, Dhariwal and Ludhiana in Punjab; Mumbai in Maharashtra; Jamnagar in Gujarat Kanpur in Uttar Pradesh; Srinagar in Jammu and Kashmir, and Ban- galore in Kamataka. We produce about 14,000 tonnes of wool. The production of woollen cloth in 1950-51 was 60 lakh metres which increased to 220 lakh metres in 1997-98. We imported wool worth rupees 79 crore.


In India, silk is obtained from silk-worms reared on mulberry trees. The area under these trees is nearly 2,40,000 hectares which is mostly confined to Kamataka, Andhra Pradesh and Tamil Nadu. The silk textile centres are, Mysore and Bangalore in Karnataka, Kanchipuram in Tamil Nadu; Varanasi in Uttar Pradesh, Murshidabad in West Bengal, Amritsar in Punjab, Srinagar in Jammu and Kashmir, Kota in Rajasthan and Surat in Gujarat.

Synthetic fabrics are prepared from rayon, nylon, threne and dacron. Their fibres are developed from wood pulp, petroleum, coal etc. through chemical processes. These fabrics are durable. The chief centres of synthetic textiles are Mumbai, Surat, Ahmedabad, Gwalior, Delhi, Amritsar and Calcutta. In 1950-51, our country produced 9,510 lakh metres of synthetic fabrics. This production rose to 22,530 lakh metres in 1997-98.


Fibre is prepared from the husk of coconut. Ropes and mats are prepared from this fibre. The industry is concentrated in rural areas of Kerala. Mostly women work in the coir industry. It provides livelihood to well over 5 lakh people. In 1950-51, our country exported coir yarn and manufactures worth rupees 13 crore which rose to 33.5 crore rupees in 1997-98.


India is an agricultural country The use of fertilizer is increasing due to intensive agriculture and Green Revolution. The soils are becoming poor due to the lack of nitrogen. So it is essential to use fertilizers to maintain soil fertility and to increase the productivity of land.

The first fertilizer plant was set up in 1906 at Ranipeth (Tamil Nadu). In 1951, Sindri Fertilizer Plant in Bihar (now Jharkhand) was set up which became the largest plant in Asia. At present, there are 55 large fertilizer plants and 87 small plants producing 17 lath tonnes nitrogen and 26 lath tonnes phosphate. The four agencies FCI, NFL, HFL and IFFCS have set up different plants. Still we have to import fertilizers.

Despite tremendous increase in the production of fertilizers large quantity is imported every year to meet the ever increasing demand. By 2000 AD. the country’s needs are estimated to be around 200 laKh tonnes and by 2050 A.D. 400 lath tonnes of fertilisers. Mostly these plants are located near the availability of raw materials like coal and petroleum and big power plants that have enough electricity to produce fertilisers from the nitrogen of the atmosphere. But now these plants are being set up where natural gas is available as it provides valuable raw material. Fertiliser plants are in public, private, joint and cooperative sectors.


It has made tremendous progress due to construction work in the urban and rural areas. There are now 144 cement factories in production with a total installed capacity of about 1100 lakh tonnes as on June 1987. In 1997- 98, our country produced 830 lakh tonnes of cement.

The industry is both in private and public sectors. The basic raw material of the industry is limestone. Major centres of cement industry are Surajpur and Dalmi Dadri in Haryana, Lakheri in Rajasthan, Porbander in Gujarat, Dalmianagar in Bihar, Rajban in Himachal Pradesh.


Ours is the largest oilseeds and vegetable oil producing country in the world. Because of our large population we are the largest consumer of vegetable oil, as it is the cooking medium all over the country. The vegetable industry was set up in 1930 and it accounted for a nominal production. The production of vegetable oil in 1960-61 was 3,40,000 tonnes which rose to 64 lath tonnes in 1997-98 from 102 mills. The consumption rose to 72 lakh tonnes. Hence, there is need for import.
Vegetable industry draws its raw material from groundnut, sun flower seeds, mustard and rape seeds, coconuts and soyabeans. Gujarat is the largest producer of vegetable oil particularly the groundnut oil. The industry is widely spread owing to its vast market and availability of various kinds of oil seeds in different parts of the country.


Roads, Railways and Airways are the chief means of transport in India. Road transport is widespread than the railway and air transport. Since Independence we have made rapid progress in the production of commercial vehicles-buses and trucks and cars, motor cycles, scooters.

Commercial vehides such as trucks are made at Jamshedpur and Chennai. Passenger vehicles such as cars are manufactured at Kolkata, Mumbai and Faridabad.

Railway Equipment. It includes railway engines, wagons and coaches. Railway engines comprise three types, namely Coal or Steam engine, Diesel engines and Electrical engines. The coal or steam engines are on their way out and are being manufactured at Chittaranjan Locomotive Works in West Bengal. The railway engines/or metre gauge railway line are manufactured by TELCO at Jamshedpur. Goods wagons are produced at a number of places in India. Integrated coaches are manufactured at Perambur near Chennai and Kapurthala.

SHIP-BUILDING centres of India are located at Cochin, Goa, Mumbai, Vishakhapatnamand.Kolkata. Cochin shipyard developed with Japanese know-how is the largest and latest in our country It builds ships of 86,000 tonnes (DWT). Vishakhapatnam yard having capacity of building ships upto 45,000 (DWT), has built 89 ships since Independence. Dry docks repair big ships. We are pianning to manufacture aircraft carriers.
The aircraft industiy has been set up at Bangalore, Koraput (Orrisa), Hyderabad, Nasik (Maharashtra), Lucknow and Korba (Chhattisgarh). These centres specialise in making certain aircrafts for defence requirements. Our country has made jet trainer plane Kiran MK II, Chetak and Cheetah he1iaWtrs. Fighter airplanes are also prepared in India like Jaguar, MIG 21, MIG 27 etc.


A wide range of electrical goods are produced in India. Now we have also started manufacturing heavy equipments like transformers, electric motors, electrical traction motors, water turbines etc. The major centres of these industries are Hyderabad, Trichi, Bangalore, Bhopal, Jagdishpur, Ranipet and Haridwar.


This industry includes the manufacturing of radio and television sets, control instruments and industrial electronics, computer systems, communication and broadcasting equipment, electronic components, aerospace and defence equipment etc. In 1997-98 its production was worth 32,070 crore rupee.


We must protect our international border and should always be ready to defend our motherland from foreign invasion. Consequently we have started manufacturing defence equipment for our army, navy and airforce. We produce heavy tanks, battleship and supersonic war planes. We are also preparing ourselves to produce missiles.


The chemical industry includes the production of drugs, pesticides, paints, dyestuffs, etc. Pesticides include insecticides, fungicides, weedicides, rodenticides which are extremely important for agriculture and useful for public health purposes. Chemical industry ranks fourth, next only to iron and steel, engineering and textile industries. The pesticides industry has made steady progress since independence. The manufacture of pesticides in our country commenced in India in 1952 with the setting up of plant at Rishra near Kolkata. It was followed by DDT plant in 1954 at Delhi.



Our country is almost self-sufficient in basic bulk drugs. A wide range of bulk drugs and formulations are being exported to several countries including West European countries. We exported drugs worth rupees 194 crore.


Industries depending upon minerals such as salt, sulphur are called chemical Industries, but indusdepending on coal, oil are called petro-chemicals. The petro-chemical products are substituting the traditional raw materials like wood, glass, metal etc. The use of plastics in various industry is bringing about revolutionary changes. The petro-chemical industry has been of recent origin in India. The products are plastic raw materials, synthetic fibres, synthetic rubber etc. The production of
synthelic fibres which was 1.5 lakh tonnes in 1985 increased to 2.5 lakh tonnes in 1996-97. Similarly the xluction of plastic raw materials increased from 2.7 lath tonnes to 2.85 lath tonnes in 1996-97. The
centres of petro-chemical industry are located at Vadodara (Gujarat) and near Mumbai.


Small scale and cottage industries play an important role in the country’s economy. These industries decayed during the British rule. But after independence, these have developed at a very rapid rate. These are a source of employment and source of income to crores of artisans, villagers and farmers. These small units need small capital investments and help large scale industries. These industries include handicrafts, khadi, leather, machine tools etc. The industries developed in villages depending on local raw materials are known as cottage industry. These include handlooms, forest based industries, bee-keeping, pottery and carpentry
India produces a large number of handicrafts. Skilled and experienced labour is working in all parts of the country About 2 crore persons are working in different cottage and handicrafts. These industries provide full time or part time employment.

Handicrafts depend upon the skill of workers. The major handicrafts include carpet making, hand printing of cloth, wood carving, toy making, earthenware, metaiware, bamboo and cane work, stone carving, coin making.

(i) Textiles. Hand woven textiles, carpet making, lace work, zari, shawls.
(ii) Metaiware. Silver and gold ware, brass, copper and bronze ware.
(iv) Stone and glass work. Marble carving, bangles, precious stones, jewellery
(v) Wood work. Wood carving, decorative furniture.
(vi) Others. Gem cutting in Surat and Jaipur, enamelled ware in Jaipur, brass plates in Muradabad, metal plates in Thanjavur, bidriware objects in Bidar (Kamataka), wood work in Kashmh, ivory articles and coir industry in Kerala.


There was a time when self sufficiency in the industrial sector was the need of hour, but now-a-days with the development of the technology and increased production India is self-sufficient. We have many surplus products which can be exported. But now-a-days self-sufficiency is not enough. Specialization is increasing in many industries. There is strong competition in international market. Our goods must be at par in the international market. Then alone we will fetch foreign exchange and increase our national wealth, remove poverty and raise the standard of living of the people. Japan is a classic example of an efficient labour. So high degree of efficiency and competitiveness is our latest priority.

Means of Communication and Trade in India

Means of Communication

Communication today is limitless network of computers, radio and T.V. broadcasting as well as traditional mail transmission. No doubt some of the chief means of communication are the same as were used a 100 years back, revolution has been in the field of transmission as well as their integrated use. The chief means of communication are the following:

(i) Postal Network: The country has today over 1,50,000 post offices and the mail system consists of traditional post cards, inland letters and envelopes. In majority of cases they are either airlifted or sent by train. In order the facilitate easy sorting and transmission the Posts and Telegraphs Department has introduced various channels like Rajdliani, Metro, Green, Business and Bulk Mail channels. Automatic mail processing centres are functioning at Kolkata, Delhi and Mumbai. Over 500 post-offices have been computerised. Today money orders can also be sent via satellites or via computer. Other new services include: e-post — chiefly meant for P.C. users. Information is communicated via internet. Bill-Post: A web-based application for payment at one source for telephone, mobile phone, electricity, water supply and municipal taxes.

(ii) Telecommunication: India is emerging the largest telecom networks nation in Asia. Apart from 32,000 landline telephone exchanges with a capacity of over 40 million lines and 35 million working landline telephones, the recent addition of mobile phones is yet to be estimated. Like in other fields Telecom services have also been thrown open to private sector. The mobile plus internet (via computer) offer immense communication—cum—knowledge based services to users. Through the mobile phone one can receive or make calls through the Global System for Mobile (GSM), on the mobile hand-held device users can do lot more than merely listening to telephone conversation. The services on mobile phone today include graphics, watching video clips, playing games, solving puzzles, doing calculation, getting information from electronic libraries anywhere in the world, reading latest news or newspaper, doing:
bank transactions and lots of other services. All these are known as Value Added Services.

(iii) Computer and Internet Communication: The internet is a network of computer linking world wide. Internet Services Provider (ISP) have registered more than 50 lakh internet subscribers in India. Basically internet is a. convergence of modern communication technologies. It initiates some of the functions that the human brain performs. For two-way communication e-mail service has both personal and business applications. It is used by millions of users daily.

(iv) Other Communication Services: These include print media like newspapers, magazines and other printed literature, Electronic mass media like radio and television which are also undergoing revolutionary changes, Fax and other services via satellites.

Trade in India

Trade occurs when there are differences in availability of resources between two areas whether at local level or global level. Foreign trade has played a crucial role in India’s economy since the time of Harappan culture 5000 years ago. During 2001 India’s exports amounted to Rs. 2,01,000 crores against imports of Rs. 2,27,000 crores. The exports registered a growth of 26.4 per cent. Chief items of export include ores,
minerals, marine products, jewellery, electronics including computer software, textiles, chemicals, engineering goods and handicrafts. The principal imports included oil (petroleum), fertilizers, edible oils, newsprint, precious stones, machinery, project goods, pharmaceuticals, chemicals, artificial resins. India’s trading partners include USA, West
European and CIS countries, ASEAN and East Asian countries. The major trading countries in ASEAN region include Malaysia, Indonesia, Thailand, Vietnam, Myanmar. New Zealand and Australia are also India’s major trading partners. Trade with South American and Caribbean nations is also increasing. The United States is India’s largest trading partner. India’s exports to USA in 2001 amounted to Rs. 42,403 crores against imports of Rs. 12,812 crores.

Balance of Trade : In the context of today’s globalisation, the unfavourable balance of trade is not worrying India very much. It is because there has been all round progress on many fronts. The trade deficit of Rs. 25,898 crores during 2001 came down from Rs. 55,967 crores in the year 2000.

Measure to Promote Exports : Exports Measures taken to promote exports include exports of value added agricultural products, setting up of trade facilitation centres abroad simplifying export- import procedures, free-trade agreements with countries like Sri Lanka as well as preferential trading agreements with many countries. Above quality improvements and improving the image of the tag ‘Made-in-India.’

Airways in India

Air transport services for personal and commercial use are together called Civil Aviation. India today has 11 international airports including 28 passenger terrünals. The Airports Authority of India controls and manages Indian space extending beyond the territorial limits of the country.
The Government has however ended the monopoly of both public sector undertaking—the Air India and Indian Airlines. The Air Corporation Act of 1953 now stands repealed. At present 38 companies are holding non-taxi operators permit. Two private scheduled airlines are also operating besides the national carrier Air India as well as Indian Airlines. The Indian Airlines provides air services for passenger, cargo and mail on the internal air network in the country and seven neighboring countries. It has in its fleet 11 airlines, 27 Boeing and five F-27 air crafts. It has its headquarters at Delhi. During the year 1992- 93, the total number of passengers carried by the Indian Airlines was 8 million.

Air India provides international air service. It carries air traffic to 88 countries. It has its headquarters at Mumbai. Vayudoot provides air service to inaccessible areas. Pawan Hans Helicopters LTD. has been providing services to ONGC, etc.