India economy, the third largest economy in the world, in terms of purchasing power, is going to touch new heights in coming years. As predicted by Goldman Sachs, the Global Investment Bank, by 2035 India would be the third largest economy of the world just after US and China. It will grow to 60% of size of the US economy. This booming economy of today has to pass through many phases before it can achieve the current milestone of 9% GDP. Trade liberalization, financial liberalization, tax reforms and opening up to foreign investments were some of the important steps, which helped Indian economy to gain momentum. Textile manufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output. The main objective of this research paper is to analyze the trend of macroeconomic indicators of the Indian economy and also to make a comparative study of the central and state deficits in public finance.

Key Words: Gross Domestic Product, Fiscal Deficit, Industrial Policy, Factor Cost, Per Capita Income