Explanation:

India is a federal economy. It has strong powers invested in the Centre with financial independence and adequacy, thus creating a federal finance system. India has not yet achieved the goal of balanced economic development. According to latest data available about 64% of total labour force is dependent on agriculture, 16% on industries and the rest about 20% on trade, transport and other services. High degree of disparity in income/wealth distribution is prevailed in India which is a characteristics feature of developing economy.
Another basic characteristic of the Indian economy is the existence of capital deficiency which is reflected in two ways - firstly, the amount of capital per head available is low; and secondly, the current rate of capital formation is also low. India lacks in large industrialisation based on modern and advanced technology, which fails to accelerate the pace of development in the economy.