The post reform period being the prospective period for strengthening the base of the Indian economical sectors for its growth with liberalization policy.
Perfect market is a hypothetical market characterised by large number of buyers and sellers in the presence of perfect knowledge. Similarly, perfect market assumes the presence of homogeneous product, total absence of government intervention and no transportation costs.
The service sector is one of the fastest growing sectors in India. Contribution of this sector in gross value addition in Indian economy was 52.97% during the financial year 2014-15 (Planning Commission 2015). India witnessed a rapid expansion in this sector after the liberalisation of the economy in 1991.
Indian liberalisation began in early 1990s’ leading to gain in momentum of foreign direct investment inflows into the country. However it was only after 2000 that the investment became significantly higher (Bibek Rya Chaudhuri, Pradyut Kumar, 2013).
The agricultural sector in India is the main source of livelihood for more than 70 percent of the rural population. Similarly half of the households in the rural population show some sign of poverty (Singh & Walis 2015).
Foreign direct investment has been recognized as an imperative driver of economic growth and development. One of the most prominent developments during the last two decades is the spectacular growth of foreign direct investment in the global economic scenario.
A well-developed manufacturing sector is needed to provide the basic needs of the population. Similarly to lead to an increasingly diversified economy and to give rise to social psychology and institutional changes manufacturing sector is a principal indicator of economic development of a nation.