The Economy and Infrastructure of IndiaOVERVIEWIndia is rich in natural resources and manpower and has made significant economic progress since its independence in 1947. The Indian economy encompasses traditional village agriculture, forestry, fishing, modern agriculture, handicrafts, a wide range of modern industries and a multitude of support services. The economy shifted from agriculture, forestry, fishing and textile manufacturing in 1947 to large heavy industries, transport and telecommunications in the late 1970s. Central government planning between 1950 and the late 1970s gave way to economic reforms and more private sector initiatives in the 1980s and 1990s. A sophisticated industrial base was created and a large pool of skilled labor emerged. However, 67% of India's workforce (nearly 400 million) works in agriculture, which contributes 30% of the country's GDP. Reforms in production, trade and investment since 1991 have provided new opportunities for Indian businessmen and about 300 million middle-class consumers. . New Delhi has avoided debt rescheduling, attracted foreign investment and restored confidence in India's economic prospects since 1991. Many of the country's fundamentals - including the savings rate (26% of GDP) and reserves (around $24 billion today) – are healthy. Inflation fell to 7% in 1997 and interest rates fell to between 10% and 13%. Nonetheless, the Indian government must restore the initial momentum for reform, including continuing to roll back many remaining government regulations. Moreover, economic policy changes have not yet significantly increased employment or reduced the risk of re-emergence of international financial tensions in the coming years. Nearly 40% of the Indian population remains too poor to afford adequate food. India's exports, foreign exchange and foreign institutional investment were affected by the East Asian crisis in late 1997 and early 1998, but capital account controls, a weak ratio of short-term debt relative to reserves, and enhanced supervision of the financial sector helped protect it from short-term balance of payments problems. Export growth slowed in 1996-97, averaging only about 4 to 5 percent - a significant drop from increases of more than 20 percent in the previous three years - mainly because of the fall of Asian currencies against Asian currencies. rupee. Energy, telecommunications and transportation shortages and a legacy of inefficient factories are holding back industrial growth, which increased by only 6.7 percent in 1997, down from more than 11 percent in 1996. Growth in agricultural sector is still quite slow, rebounding to only 5.7% in 1997. compared to a decline of 0.1% in 1996. Agricultural investment has slowed, while costly subsidies for fertilizers, food distribution and rural electricity remains..