The Indian Economy

India is among the fast growing economies in the world. According to the International Monetary Fund (IMF), in 2010, Indias gross domestic product (GDP) grew at 10. 6% compared to 10.4% for China. The Indian economy is comprised mainly of the Agriculture, Industry and Services Sector. Over the past few decades, the service sector has grown to dominate the Indian economy while employing the least number of people. India has a huge demographic advantage. According to a McKinsey & Company (2007) forecast 583 million Indians will be in the middle class if the Indian economy grows at the rate of 7.3% between 2005 and 2012. A huge middle class is a huge growth driver for any economy given the huge increase in disposable income and an increase in the literacy rate. With 54% of Indians below 25 years of age, India currently has the youngest population in the world. All this is leading to a change in the consumption pattern with an increase in demand for discretionary services like education, private health, personal care and hotels and restaurants. Technology has had a profound impact on the economy and political power of any nation. The industrial revolution of the 18th century propelled European nations to become major powerhouses. They were able to produce finished goods at much cheaper and faster rates than the entire world. This also helped them establish their dominance over other nations, such as India. In the modern context, techonology is becoming the make or break factor for any nation. Thus, a huge amount of emphasis is being placed on the creation of a knowledge ecosystem which could produce scientists, researchers and engineers to propel the country to greater heights and establish it as a knowledge economy.
Fig 1: Sector wise Contribution to Indian Economy
60 50 40 Primary/Agriculture 30 20 10 0 1950-60 1960-70 1970-80 1980-90 1990-01 2000-10 Secondary/Industries Tertiary/Services

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In the succeeding sections, we will look at the impact of technology on the three main sectors of the economy. We will also look at some new and innovative breakthroughs which hold the potential to transform the respective sectors.

Impact of Technology on Agriculture

The agricultural sector is the most critical part of the Indian economy as it employs almost 51% of the population. This is a sector which has already witnessed the impact of technology. PostIndependence, the Green Revolution which brought modern agricu ltural practices to the Indian farmers, revolutionized the Indian agricultural landscape. It is due to this revolution that India today enjoys a lions share of the global agricultural market and has food security. However, the sector is once again needs another revolution. India lacks modern technology and supply chain systems when it comes to cold storage, food packaging and transport infrastructure. This causes one of the world's highest food spoilage rates, particularly during Indian monsoons and other adverse weather conditions. Food travels to the Indian consumer through a slow and inefficient chain of traders. In such a scenario, techonology can play a critical role. One such technology is ICT. This technology has already revolutionized the services sector. It allows instant transmission of data and communication services from any part of the world. Effectively, it would involve getting all the farmers online. This has already been implemented by the state of Gujarat and has shown impressive results. If it is implemented on a nationwide scale, it would enable farmers to instantly seek advice from agricultural experts and voice their concerns. It would also help them by providing weather forecasts in order to optimize farming activities. A number of other applications could be the implementation of a real time data collection system which would allow experts to monitor fields and give instant suggestions to the farmer for best results. This could be done through optical sensors (Fig 2) or through the use of breakthrough technologies such as Google Glass.

Fig 2: a) Google Glass in agriculture

b) Optical Sensors for nutrient detection

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Impact of Technology on Industry

The Industrial sector accounts for 26% of the GDP and employs 22% of the total workforce.[76]India is 11th in the world in terms of nominal factory output according to data compiled through CIA World Factbook figures. One of the major events in the history of the Indian industrial Sector was the economic liberalization of 1991, which removed import restrictions and brought in foreign competition. Further, it led to the privatisation of certain public sector industries, improved infrastructure and led to an expansion in the production of fast moving consumer goods.[77] The stresses levied on the Indian industries in the post liberalization period ensured that Indian manufacturers had to adapt to comptete. In the survival of the fittest environment that was created, several Indian players managed to innovate and revamp themselves and have managed to become global players. A key factor in their development was innovative breakthroughs in the manufacturing process by new technology developed locally as well as globally. The industrial sector currently faces a new problem. The threat of cheap, low quality products from China is immense. Markets are flooded with Chinese goods from electronics to household appliances. It is high time that Indian companies rise up to the challenge or else face the threat of loosing their market. Technology can once again be the answer. One of the major problems limiting the growth of manufacturing industries is the lack of sufficient access to cheap electricity. Given Indias limited access to coal, renewable energy sources need to be found. An innovative solution could be a nuclear reactor which runs on the spent fuel of other conventional nuclear reactors. This has been developed by a group of MIT graduate students and is in the prototyping Fig 3: Nuclear Power Reactor stages. If successful it could remove one of the key concerns of nuclear power, the huge amount of highly radioactive waste. It is also cheaper to construct and operate than conventional nuclear reactors. This and other alternative fuel based energy solutions is what India needs.

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Impact of Technology on Service Sector

The service sector saw a massive rise in contribution to the economy only after the economic reforms of 1991. Until then, India was largely an agrarian economy. The share of services sector was small and a large number of services were government monopolies. However, India currently has become a giant on the global services scene. Several hubs have been developed in Bangalore, Gurgaon, Noida, etc. which cater to Indian as well as Multi national companies. The growth of the Business Process Outsourcing Industry has been the primary factor in this rise. Other sectors such as Tourism and retail have also seen a received a massive boost. However, India is yet to reach its complete potential when it comes to dominating the service sector. India still has a low ICT penetration of 1.53 internet subscribers per 100 inhabitants compared to 8.35 in China and 35.68 in Korea. This is a cause for concern as India aspires to develop as a knowledge hub. This may be attributed to the low literacy rate. A possible solution maybe a technology called Project Loon, which is being developed by Google. It basically seeks to provide internet connections to faroff areas which do not have internet access to get online. This is achieved by Fig 4: A Project Loon Prototype transmitting signals through a network of balloons. This technology would be perfect for the Indian conditions with a variety of landscapes and difficult to reach terrains. Another technology which could revolutionise the baking industry is being worked on by a startup called Dwolla. They seek to eliminate credit cards by providing an extremely cheap and quick way of money transfer. This is done through the internet and thus also allows users to transfer money not just to bank accounts but also to email, facebook and twitter accounts. This technology would completely change the way online transactions are made and benefit businesses by saving the cost of transaction which had to be paid to credit card companies.

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