The modern industrialized sector of the economy is only about 10% of the total economy.  The traditional economy accounts for the remaining 90%, 67% of which is in agriculture and 23% of which is made up of small-scale, cottage industries of one kind or another.  In terms of income distribution, some 34% of all wealth is help by the top 10% of the population.  The bottom 40% of the population controls only 16% of the wealth.

It was primarily Jawaharlal Nehru, India's first Prime Minister after independence, and his Indian National Congress Party which put into place the socialist-cum-capitalist policies of rapid industrialization, import substitution, and control by the government of the "commanding heights" of the economy, and it was Nehru who successfully fashioned the requisite political coalition that enabled a small, elite group of secular, highly westernized modern leaders to rule.  For many years this elite coalition ruled the nation, but the economic and political results have been mixed.  In more recent years, there has been a strong reaction against the elitist Nehruvian model and the Congress Party, and currently a much more conservative, Hindu-oriented political party (the Bharatiya Janata Party) has come to power which claims to represent the interests of the rapidly growing middle class.  As a result, there is a great deal of political instability at the present time in India which has greatly hindered efforts at liberalization and economic reform.  The future of the political economy of India, both in terms of policy and performance, is, therefore, largely uncertain.