The economic system of any country is geared to satisfy the unlimited wants of its people, using scarce resources, through organized group behaviour Hence, human behaviour plays an important role in determining economic activity. Human behaviour in turn is influenced to a great extent by social institutions. Hence, the economic history of a people is obviously an aspect of their social history, and cannot be fully comprehended without reference to it. It is interwoven with the structure and norms of the social institutions of a country, and economic developments both influence and in turn arc influenced by the social institutions. In short, economic development has both social causes and consequences.
Ancient and Medieval Characteristics : Though ancient India had a significant urban population, much of India's population resided in villages, whose economy was largely isolated and self-sustaining. Agriculture was the predominant occupation of the populace and satisfied a village's food requirements besides providing raw materials for hand based industries like textile, food processing and crafts. Besides farmers, other classes of people were barbers, carpenters, doctors (Ayurvedic practitioners), goldsmiths, weavers, etc.