The 16 Economies of India

Author : Sunny Narang

Source : From LinkedIn Archives

Date first published : October 3rd , 2015

Just as there is no one culture , one religion , one ideology , one language there is no One Indian Economy .

And it is not even a State , it is a hybrid of a State and a Non-State with almost open borders on many sides and many regions not under any State control , either under Maoists or other regional underground forces or Bahubalis.
The only truth about India , is that it Exists in the Collective Imagination of Many . Who knows what percentage , but it is a Majority above 2/3rd’s !

It is a Bahu-Sampradaya in every sense of the concept. Many schools of comprehension . But as we all believe that all pathways lead to the One , so even all socio-political pathways lead to a land between Pakistan and China , Myanmar and the seas . Bhutan,Nepal and Bangladesh are gray zones of transition.

During the Colonial regime , many trader communities from Marwaris and Parsees to Chettiars and few Brahmins , educated communities of few Brahmins and many Kayasthas , and most royalty , Rajput or Maratha was well tied to the British regime and they sustained and built power . 
Hence in the Freedom movement , these communities were politically active in various ideological camps . The professionals and traders led Congress , the landed were either the Muslim League or the Hindu Mahasabha . Though all had hybrids of the others .

After 1947 the New Socialist State had the Rajput-Brahmin lobbies lead the Congress and the various Hindu bodies had mix of Old Royalty — Brahmins and the Banias . Though the Congress had its own Royalty as well as Industrialists from Bania community . The Communist Party was led also by Upper-Class Brahmins like Namboodripad and middling-landlords-professional families like Jyoti Basu .

OBC equivalent movements inspired by Shahuji Maharaj had started by early 20th century in Kolhapur and later in 1920’s in Madras State .

Shahu I (also known as Rajarshi Shahu or Chhatrapati Shahuji Maharaj) (26 June 1874–6 May 1922) of the Bhonsle dynasty, was the Raja 1894–1900 and first Maharaja (1900–1922) of the Indian princely state of Kolhapur. When the Brahmin priests of the royal family refused to perform the rites of the non-Brahmins in accordance with the Vedic hymns, he took the daring step of removing the priests and appointment a young Maratha as the religious teacher of the non-Brahmins, with the title of `Kshatra Jagadguru’ (the world teacher of the Kshatriyas). This was known as the `Vedokta’ controversy. It brought a hornet’s nest about his ears but he was not the man to retrace his steps in the face of opposition. He soon became the leader of the non-Brahmin movement and united the Marathas under his banner.

26 July 1902

Chatrapati Sahu Maharaja had given 50% reservation in his states for non Brahmins increasing it to 90% in 1920.

Meanwhile in Madras state and later Tamil Nadu .


Caste was kept as primary factor in the recruitment process for Government jobs in Madras state. The allocation was made as follows: 2 out of 12 were allocated for Brahmins, 5 for non Brahminical Hindus, 2 for Muslims, 2 for Anglo Indian’s and 1 for SC.


According to a memorandum submitted to the viceroy by Dr. Babasaheb Ambedkar, the First Law Minister, 8.33% of reservation in services in favor of the Scheduled Castes became effective.


16% Reservation for SC/ST and 25% Reservation for OBCs introduced. Total Reservation Stood at 41%

DMK Government Split OBC reservations as 2 Parts with 30% for OBC and 20% for MBC. Separate Reservation of 1% introduced for Scheduled Tribes. Total Reservation percentage stood at 69%.

While in rest of India it took effect only in 2008 :
On 10 April 2008, the Supreme Court of India upheld the law that provides for 27% reservation for Other Backward Castes (OBCs) in educational institutions supported by the Central government, while ruling that the creamy layer among the OBCs should be excluded from the quota.

So as of 2015 my list of 16 Indian Economies is based on a combination of region , aspirations , caste-coalitions , and material history . There are 3 National Economies among the 16 . And all these economies intersect and hybridise with each other . The idea is to comprehend the various levels these multiple economies exist . The population and GDP percentages will add up to about 100% . But the Central Government , Floating Population and the Underground will add in unknown ways to each of the 13 regional economies .

The prediction of how any policy affects pan India or how a recession affects India will actually be based on an understanding of all these 16 economies .

The Capitalist Centre , the Wannabe and the NCR and Punjab regions are the main economic engines accounting for almost 40% of the population and 55% of the GDP . These are the most connected to Global and National economies and policy regimes .

The OBC-Muslim , Rajput-Brahmin Economies along with Central Indian Mining Economies are the bottom-end and major labour suppliers with almost 47% population and 28.5% of the GDP .

The assorted leftover regions like Kerala , West Bengal, North East , Jammu and Kashmir and the Union Territories are the higher end service suppliers .

Looking at India as an undifferentiated mass of peasants , workers , agricultural labour , artisans or capitalists is actually not really helpful . 
Poverty and Immigration is now a regional issue with many complexities . 
A good diagnoses is essential before one makes any new policy .

1. Uttar Pradesh and Bihar : The OBC-Muslim Economy : Agriculture and Artisan led by Government Contract Bahubali’s . So political power based on caste-religion is essential . They also supply labour to rest of India . (NOIDA is an exception to the Delhi NCR ) . Population : 300 million plus (more than 25% of India) : GDP 11.5% 
2. Uttarakhand and Himachal : The Himal Economy : Horticulture , Religious and Recreational tourism , Education . Led by Rajputs and Brahmins . Population : 17 million(1.4%) :GDP 2% 
3. Punjab: Agriculture, Small and Medium Industry or the Jugaad Economy : Population 27.7 million (2.3%) : GDP 3 % . 
4. Haryana and Delhi : Sarkar-Service-Auto Economy : Led by the Bania-Punjabi-Jat coalition . Population 42 million ( 3.4%) : GDP 7.5% . If we add Noida and Ghaziabad it will become 4% of Indian population and more than 8% of Indian GDP. 
5. Rajasthan and Madhya Pradesh : Rajput-Brahmin Economy : Agriculture , Government Contracts , Tourism , Basic Mining , Artisan and few Industrial parks . In these both the Congress-BJP upper caste coalitions have never been challenged. They are along with Himachal and Uttaranchal the traditional states . Population : 140 million plus ( 11.7%) . GDP 9.05% . 
6. Jharkhand, Chattisgarh , Odisha : Central India Mining Economies : Led by a combination of Tribal and Upper-Caste Rajput plus Brahmin coalitions . Odisha is led by Naveen Patnaik which is a Karan caste , a Kayastha equivalent . Population : 100 million plus (8.4%) : GDP 6% .
7. Maharashtra , Gujarat , Tamil Nadu : The Centre of Capitalist Economy : The manufacturing , financial hubs with also developed agriculture . The political class is more evolving to a multiple community partnership with Upper and Middle castes having made compromises . The Dalits are also well organised compared to other states . Most “Meritocratic” states of India . Population : 250 million (21%) GDP : 30% . 
8. Kerala : Static-Service-Supply Economy : Tourism, Educated Workers , Plantations . A social balance with a very complex coalition politics . Population : 33.3 million ( 2.76%) . GDP 3.78% .
9. Telengana, Andhra Pradesh , Karnataka : Wannabe Central Capitalist Centre Economies : Growing with Industry , Technology Services and organised agriculture . Population : 146 million ( 12%) GDP 14% .
10. The North-East States : 8 of them including Sikkim . Heavily Subsidized Economies : Agricultural and educated Service Workers. Tribal or Complex coalitions in Assam . Population : 45 million (3.8% ) GDP : 2.7% 
11. Goa , Puducherry , Andamans , Chandigarh , Daman , Diu , Lakshwadeep Dadra and Nagar Haveli : State of Mind Economies : Tourism , Government Services , some Industry . Population : 5 million ( 0.4%) GDP : 1% plus 
12. Jammu and Kashmir : Confused Economy : Between a Horticulture , Subsidised , Artisan and Defence Forces and trans-border funded economy .Population : 12.5 million ( 1% plus) GDP : 0.84% 
13 . West Bengal : Bhadralok Economy : Decaying Industry , Agriculture-Horticulture . No one knows what next . Population : 92 million (7.6% ) GDP 6.75% 
14 . The Central Government Economy : Central Public Sector , Government , Army, Railways , Banking , Postal Services . The Delhi-Mumbai Axis with installations Educational and Industrial , Research and Defense , Infrastructure pan-India . In 2008, the organised sector employed 27.5 million workers, of which 17.3 million worked for government or government owned entities . The Central government, with 3.1 million employees, including 1,394,418 people working for the Railways, accounting for 44.81 per cent of the entire Central government workforce. The Indian Army is 1.32 million active and another 1.15 million in reserves , so a total of about 2.5 million .

So the Centre has about 6 million direct employees and estimates on contract may be equal or more than this figure .

Direct and Indirect employment would be easily about 30 million , and so the population based on Central Services could easily be 100–120 million or 10% of Indian population .

Based upon the survey conducted by the Department of Public Enterprises in 2012, the turnover of Central Public Sector Enterprises (CPSEs) contributes to over 20 per cent of the country’s GDP. And Central Government expenditure by WB figures is about 12% of GDP .

So this CPSU/CG Economy has a population of about 100–120 million 10% of Indian population and as percentage of GDP is about 30%

15. The Floating Underclass Economy : Internal migrants, especially short-term seasonal/circular migrants who move back and forth between source and destination locations, constitute a floating population, which is put at anywhere between 15 million and 100 million workers by different estimates. Migrants constitute a significant share of a state’s gross domestic product, about 10% in the case of Bihar and 3–4% in the case of Uttar Pradesh. Some estimates put annual and settled migration in India upto 400 million and their remittances and income could be upto 5–10% of Indian GDP.

16. The Underground or Black Economy: The Global Hawala , and all the other 15 intersect with this economy , and it can be anything 25–50% of the visible economy.