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Indian Economy had seen many ups and downs in its earlier stages and presently exhibits a galloping rise from 6% GDP in 1985 to that of 24% by the end of 2006. The pre-colonial Indian economy was self-sufficient in every sense of the term with trade relations the world over. This stability was distorted during the colonization period when the total Indian share in the world income fell to 3.8% in 1954 from a respectable 22.3% in 1700. The condition was resolved to a better position with the post-Independence Five Year Plans which brought about a fast paced industrial development in the country. The development was such that the GDP rise was a high as 9% in 2005-06 from a mere 2.5% in 1951-52. Economic liberalization introduced by Man Mohan Singh in 1991 heralded the economic reform movements which include tax reforms, financial liberalization and trade liberalization.
Following socialist-inspired policies, Indian economy stresses the ownership of the sectors by the state government. Indian economy has seen tremendous growth in the recent years and has positioned itself at the twelfth position among the largest world economies. Although agriculture lies at the backbone of the economy, the total contribution of cities and towns accounts to 2/3rds of the total economy. India's trade share in that of the world is 1% in which software, jewellery, textiles, etc. are the chief export items. The list of import items includes chemicals, crude oil, machineries and so on.
In the recent years, the Indian economy has exhibited an astonishing growth. The best example is shown by the inflation target rising to 11%, the decade's highest level ever set by the RBI. Besides, the nuclear treaty signed with US would bring about a reduction in the demand for oil.
Investment has become a major requisite for the development of the Indian economy. Airports, Railways, roads and ports are seen as potent areas, investment wherein will bear prolific returns.
The economic scenario of India has seen the following growth trends over the years: