Background Notes: India

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Although India occupies only 2.4% of the world's land area, it supports over 15% of the world's population. Only China has a larger population. Almost 40% of Indians are younger than 15 years of age. About 70% of the people live in more than 550,000 villages, and the remainder in more than 200 towns and cities. Over thousands of years of its history, India has been invaded from the Iranian plateau, Central Asia, Arabia, Afghanistan, and the West; Indian people and culture have absorbed and changed these influences to produce a remarkable racial and cultural synthesis.

Religion, caste, and language are major determinants of social and political organization in India today. The government has recognized 18 languages as official; Hindi is the most widely spoken.

Although 83% of the people are Hindu, India also is the home of more than 120 million Muslims--one of the world's largest Muslim populations. The population also includes Christians, Sikhs, Jains, Buddhists, and Parsis.

The caste system reflects Indian occupational and religiously defined hierarchies. Traditionally, there are four broad categories of castes (varnas), including a category of outcastes, earlier called "untouchables" but now commonly referred to as "dalits." Within these broad categories there are thousands of castes and subcastes , whose relative status varies from region to region. Despite economic modernization and laws countering discrimination against the lower end of the class structure, the caste system remains an important source of social identification for most Hindus and a potent factor in the political life of the country.



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The people of India have had a continuous civilization since 2500 B.C., when the inhabitants of the Indus River valley developed an urban culture based on commerce and sustained by agricultural trade. This civilization declined around 1500 B.C., probably due to ecological changes.

During the second millennium B.C., pastoral, Aryan-speaking tribes migrated from the northwest into the subcontinent. As they settled in the middle Ganges River valley, they adapted to antecedent cultures.

The political map of ancient and medieval India was made up of myriad kingdoms with fluctuating boundaries. In the 4th and 5th centuries A.D., northern India was unified under the Gupta Dynasty. During this period, known as India's Golden Age, Hindu culture and political administration reached new heights.

Islam spread across the subcontinent over a period of 500 years. In the 10th and 11th centuries, Turks and Afghans invaded India and established sultanates in Delhi. In the early 16th century, descendants of Genghis Khan swept across the Khyber Pass and established the Mughal (Mogul) Dynasty, which lasted for 200 years. From the 11th to the 15th centuries, southern India was dominated by Hindu Chola and Vijayanagar Dynasties. During this time, the two systems--the prevailing Hindu and Muslim--mingled, leaving lasting cultural influences on each other.

The first British outpost in South Asia was established in 1619 at Surat on the northwestern coast. Later in the century, the East India Company opened permanent trading stations at Madras, Bombay, and Calcutta, each under the protection of native rulers.

The British expanded their influence from these footholds until, by the 1850s, they controlled most of present-day India, Pakistan, and Bangladesh. In 1857, a rebellion in north India led by mutinous Indian soldiers caused the British Parliament to transfer all political power from the East India Company to the Crown. Great Britain began administering most of India directly while controlling the rest through treaties with local rulers.

In the late 1800s, the first steps were taken toward self-government in British India with the appointment of Indian councilors to advise the British viceroy and the establishment of provincial councils with Indian members; the British subsequently widened participation in legislative councils. Beginning in 1920, Indian leader Mohandas K. Gandhi transformed the Indian National Congress political party into a mass movement to campaign against British colonial rule. The party used both parliamentary and nonviolent resistance and noncooperation to achieve independence.

On August 15, 1947, India became a dominion within the Commonwealth, with Jawaharlal Nehru as Prime Minister. Enmity between Hindus and Muslims led the British to partition British India, creating East and West Pakistan, where there were Muslim majorities. India became a republic within the Commonwealth after promulgating its constitution on January 26, 1950.

After independence, the Congress Party, the party of Mahatma Gandhi and Jawaharlal Nehru, ruled India under the influence first of Nehru and then his daughter and grandson, with the exception of two brief periods in the 1970s and 1980s.

Prime Minister Nehru governed the nation until his death in 1964. He was succeeded by Lal Bahadur Shastri, who also died in office. In 1966, power passed to Nehru's daughter, Indira Gandhi, Prime Minister from 1966 to 1977. In 1975, beset with deepening political and economic problems, Mrs. Gandhi declared a state of emergency and suspended many civil liberties. Seeking a mandate at the polls for her policies, she called for elections in 1977, only to be defeated by Moraji Desai, who headed the Janata Party, an amalgam of five opposition parties.

In 1979, Desai's Government crumbled. Charan Singh formed an interim government, which was followed by Mrs. Gandhi's return to power in January 1980. On October 31, 1984, Mrs. Gandhi was assassinated, and her son, Rajiv, was chosen by the Congress (I)--for "Indira"--Party to take her place. His government was brought down in 1989 by allegations of corruption and was followed by V.P. Singh and then Chandra Shekhar.

In the 1989 elections, although Rajiv Gandhi and Congress won more seats in the 1989 elections than any other single party, he was unable to form a government with a clear majority. The Janata Dal, a union of opposition parties, was able to form a government with the help of the Hindu-nationalist Bharatiya Janata Party (BJP) on the right and the communists on the left. This loose coalition collapsed in November 1990, and the government was controlled for a short period by a breakaway Janata Dal group supported by Congress (I), with Chandra Shekhar as Prime Minister. That alliance also collapsed, resulting in national elections in June 1991.

On May 27, 1991, while campaigning in Tamil Nadu on behalf of Congress (I), Rajiv Gandhi was assassinated, apparently by Tamil extremists from Sri Lanka. In the elections, Congress (I) won 213 parliamentary seats and put together a coalition, returning to power under the leadership of P.V. Narasimha Rao. This Congress-led government, which served a full 5-year term, initiated a gradual process of economic liberalization and reform, which has opened the Indian economy to global trade and investment. India's domestic politics also took new shape, as traditional alignments by caste, creed, and ethnicity gave way to a plethora of small, regionally based political parties.

The final months of the Rao-led government in the spring of 1996 were marred by several major political corruption scandals, which contributed to the worst electoral performance by the Congress Party in its history. The Hindu-nationalist Bharatiya Janata Party (BJP) emerged from the May 1996 national elections as the single-largest party in the Lok Sabha but without enough strength to prove a majority on the floor of that Parliament. Under Prime Minister Atal Bihari Vajpayee, the BJP coalition lasted in power 13 days. With all political parties wishing to avoid another round of elections, a 14-party coalition led by the Janata Dal emerged to form a government known as the United Front, under the former Chief Minister of Karnataka, H.D. Deve Gowda. His government lasted less than a year, as the leader of the Congress Party withdrew his support in March 1997. Inder Kumar Gujral replaced Deve Gowda as the consensus choice for Prime Minister of a 16-party United Front coalition.

In November 1997, the Congress Party again withdrew support for the United Front. New elections in February 1998 brought the BJP the largest number of seats in Parliament--182--but fell far short of a majority. On March 20, 1998, the President inaugurated a BJP-led coalition government with Vajpayee again serving as Prime Minister. On May 11 and 13, 1998, this government conducted a series of underground nuclear tests forcing U.S. President Clinton to impose economic sanctions on India pursuant to the 1994 Nuclear Proliferation Prevention Act.

In April 1999, the BJP-led coalition government fell apart, leading to fresh elections in September. The National Democratic Alliance-a new coalition led by the BJP-gained a majority to form the government with Vajpayee as Prime Minister in October 1999.

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According to its constitution, India is a "sovereign, socialist, secular, democratic republic." Like the United States, India has a federal form of government. However, the central government in India has greater power in relation to its states, and its central government is patterned after the British parliamentary system.

The government exercises its broad administrative powers in the name of the president, whose duties are largely ceremonial. The president and vice president are elected indirectly for 5-year terms by a special electoral college. Their terms are staggered, and the vice president does not automatically become president following the death or removal from office of the president.

Real national executive power is centered in the Council of Ministers (cabinet), led by the prime minister. The president appoints the prime minister, who is designated by legislators of the political party or coalition commanding a parliamentary majority. The president then appoints subordinate ministers on the advice of the prime minister.

India's bicameral parliament consists of the Rajya Sabha (Council of States) and the Lok Sabha (House of the People). The Council of Ministers is responsible to the Lok Sabha.

The legislatures of the states and union territories elect 233 members to the Rajya Sabha, and the president appoints another 12. The elected members of the Rajya Sabha serve 6-year terms, with one-third up for election every 2 years. The Lok Sabha consists of 545 members; 543 are directly elected to 5-year terms. The other two are appointed.

India's independent judicial system began under the British, and its concepts and procedures resemble those of Anglo-Saxon countries. The Supreme Court consists of a chief justice and 25 other justices, all appointed by the president on the advice of the prime minister.

India has 25 states* and 7 union territories. At the state level, some of the legislatures are bicameral, patterned after the two houses of the national parliament. The states' chief ministers are responsible to the legislatures in the same way the prime minister is responsible to parliament.

Each state also has a presidentially appointed governor who may assume certain broad powers when directed by the central government. The central government exerts greater control over the union territories than over the states, although some territories have gained more power to administer their own affairs. Local governments in India have less autonomy than their counterparts in the United States. Some states are trying to revitalize the traditional village councils, or panchayats, which aim to promote popular democratic participation at the village level, where much of the population still lives.

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President--Kocheril Raman Narayanan
Vice President--Krishan Kant
Prime Minister--Atal Bihari Vajpayee
Minister of External Affairs-Jaswant Singh
Minister of State (External Affairs)-Ajit Kumar Panja
Ambassador to the U.S.--Naresh Chandra
Ambassador to the UN--Kamalesh Sharma

India maintains an embassy in the United States at 2107 Massachusetts Avenue NW, Washington, DC 20008 (tel. 202-939-7000, fax 202-265-4351, email indembwash@indiagov.org) and consulates general in New York, Chicago, Houston, and San Francisco.

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Prime Minister Atal Bihari Vajpayee took office in October 1999 after a general election in which a BJP-led coalition of 13 parties called the National Democratic Alliance emerged with an absolute majority. The coalition reflects the ongoing transition in Indian politics away from the historically dominant and national-based Congress Party toward smaller, narrower-based regional parties. This process has been underway throughout much of the past decade and is likely to continue in the future.

The Bharatiya Janata Party emerged as the single-largest party in the Lok Sabha (lower house of Parliament) elections in September 1999. The BJP currently leads a coalition government under Prime Minister A.B. Vajpayee. Party President Kushabhau Thakre was elected by the Party National Executive in April 1998. The Hindu-nationalist BJP draws its political strength mainly from the "Hindi belt" in the northern and western regions of India. The party holds power in the states of Gujarat, Uttar Pradesh (in coalition with several small parties), Himachal Pradesh (in coalition with Himachal Vikas Congress) Punjab (in coalition with Akali Dal) and in Haryana (in coalition with the Indian National Lok Dal). Popularly viewed as the party of the upper caste and trading communities, the BJP has made strong inroads into the lower caste vote bank in recent national and state assembly elections.

The Congress (I) Party, led by Sonia Gandhi (widow of the late Prime Minister Rajiv Gandhi), holds the second-largest number of seats in the Lok Sabha. Priding itself as a secular, centrist party, the Congress has been the historically dominant political party in India. Its performance in national elections has steadily declined during the last decade. The Congress still rules in the states of Madhya Pradesh, Rajasthan, Maharashtra (in coalition with the National Congress Party), Karnataka, and three of the smaller states in the northeast. The political fortunes of the Congress have suffered badly as major groups in its traditional vote bank have been lost to emerging regional and caste-based parties, such as the Bahujan Samaj Party and the Samajwadi Party.

The Janata Dal (United) Party claims to be a national party but currently holds significant strength only in Karnataka and Bihar. It advocates a secular and socialist ideology and draws much of its popular support from Muslims, lower castes, and tribals.

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India's population continues to grow at about 1.8% per year and is estimated at one billion. While its GDP is low in dollar terms, India has the world's 13th-largest GNP. About 62% of the population depends directly on agriculture.

Industry and services sectors are growing in importance and account for 26% and 48% of GDP, respectively, while agriculture contributes about 25.6% of GDP. More than 35% of the population live below the poverty line, but a large and growing middle class of 150-200 million has disposable income for consumer goods.

India embarked on a series of economic reforms in 1991 in reaction to a severe foreign exchange crisis. Those reforms have included liberalized foreign investment and exchange regimes, significant reductions in tariffs and other trade barriers, reform and modernization of the financial sector, and significant adjustments in government monetary and fiscal policies.

The reform process has had some very beneficial effects on the Indian economy, including higher growth rates, lower inflation, and significant increases in foreign investment. Real GDP growth was 6.8% in 1998-99, up from 5% in the 1997-98 fiscal year. Growth in 1999-2000 is expected to be around 6%. Foreign portfolio and direct investment flows have risen significantly since reforms began in 1991 and have contributed to healthy foreign currency reserves ($32 billion in February 2000) and a moderate current account deficit of about 1% (1998-99). India's economic growth is constrained, however, by inadequate infrastructure, cumbersome bureaucratic procedures, and high real interest rates. India will have to address these constraints in formulating its economic policies and by pursuing the second generation reforms to maintain recent trends in economic growth.

India's trade has increased significantly since reforms began in 1991, largely as a result of staged tariff reductions and elimination of nontariff barriers. The outlook for further trade liberalization is mixed. India has agreed to eliminate quantitative restrictions on imports of about 1,420 consumer goods by April 2001 to meet its WTO commitments. On the other hand, the government has imposed "additional" import duties of 5% on most products plus a surcharge of 10% over the past 2 years. The U.S. is India's largest trading partner; bilateral trade in 1998-99 was about $10.9 billion. Principal U.S. exports to India are aircraft and parts, advanced machinery, fertilizers, ferrous waste and scrap metal, and computer hardware. Major U.S. imports from India include textiles and ready-made garments, agricultural and related products, gems and jewelry, leather products, and chemicals.

Significant liberalization of its investment regime since 1991 has made India an attractive place for foreign direct and portfolio investment. The U.S. is India's largest investment partner, with total inflow of U.S. direct investment estimated at $2 billion (market value) in 1999. U.S. investors also have provided an estimated 11% of the $18 billion of foreign portfolio investment that has entered India since 1992. Proposals for direct foreign investment are considered by the Foreign Investment Promotion Board and generally receive government approval. Automatic approvals are available for investments involving up to 100% foreign equity, depending on the kind of industry. Foreign investment is particularly sought after in power generation, telecommunications, ports, roads, petroleum exploration and processing, and mining.

India's external debt was up to $98 billion in March 1999, compared to $94 billion in March 1998. The country's debt service ratio has fallen to about 20%. Bilateral assistance has been about $1 billion annually in recent years, with the U.S. providing about $150 million in development assistance in Fiscal Year 1999. The World Bank had approved loans worth about $1.05 billion for India in 1999.

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India's size, population, and strategic location give it a prominent voice in international affairs, and its growing industrial base, military strength, and scientific and technical capacity give it added weight. It collaborates closely with other developing countries on issues from trade to environmental protection. The end of the Cold War dramatically affected Indian foreign policy. India remains a leader of the developing world and the Non-Aligned Movement (NAM), and hosted the NAM Heads of State Summit in 1997. India is now also seeking to strengthen its political and commercial ties with the United States, Japan, the European Union, Iran, China, and the Association of Southeast Asian Nations. India is an active member of the South Asia Association for Regional Cooperation (SAARC) and the Indian Ocean Rim Association for Regional Cooperation (IORARC).

India has always been an active member of the United Nations and now seeks a permanent seat on the UN Security Council. India has a long tradition of participating in UN peacekeeping operations and most recently contributed personnel to UN operations in Somalia, Cambodia, Mozambique, Kuwait, Bosnia, Angola, and El Salvador.

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India's nuclear tests in May 1998 seriously damaged Indo-American relations. President Clinton imposed wideranging sanctions pursuant to the 1994 Nuclear Proliferation Prevention Act. The United States encouraged India to sign the Comprehensive Nuclear Test Ban Treaty (CTBT) immediately and without condition. The U.S. also called for restraint in missile and nuclear testing and deployment in both India and Pakistan. The nonproliferation dialogue initiated after the 1998 nuclear tests has bridged many of the gaps in understanding between the countries. However, India has yet to sign the CTBT, agree to a fissile material production moratorium, or define its intentions on acquiring a nuclear deterrent clearly. U.S. sanctions on Indian entities involved in the nuclear industry and opposition to international financial institution loans for non-humanitarian assistance projects in India remain sources of friction.

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Ambassador--Richard F. Celeste
Deputy Chief of Mission--E. Ashley Wills
Public Affairs--Francis B. Ward
Political Affairs-Robert K. Boggs
Economic and Scientific Affairs--Alice A. Dress
Commercial Affairs--Carol M. Kim
Agricultural Affairs--Waylon M. Beeghly
Administrative Affairs--Peter W. Bodde
Consular Affairs-John R. Nay
USAID Mission, Director--Linda E. Morse

Consuls General Mumbai (formerly Bombay)--David P. Good
Calcutta--Chris J. Sandrolini
Chennai (formerly Madras)--Bernard J. Alter

The U.S. embassy in India is located on Shantipath, Chanakyapuri, New Delhi 110021 (tel. 91-11-419-8000) (fax: 91-11-4190017). Embassy and consulate working hours are Monday to Friday, 8:30 a.m. to 5:30 p.m. Visa application hours are Monday to Friday, 8:30 a.m. to 10:00 a.m.

*This number includes the Indian state of Jammu and Kashmir. The United States considers all of the former princely state of Kashmir to be disputed territory. India, Pakistan, and China each control parts of Kashmir.



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