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India Main Page

 

India's Economy

Economy - overview:
India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. Merchandise exports, which account for about 15% of GDP, returned to pre-financial crisis levels. An industrial expansion and high food prices, resulting from the combined effects of the weak 2009 monsoon and inefficiencies in the government's food distribution system, fueled inflation which peaked at about 11% in the first half fo 2010, but has gradually decreased to single digits following a series of central bank interest rate hikes. New Delhi in 2010 reduced subsidies in fuel and fertilizers, sold a small percentage of its shares in some state-owned enterprises and auctioned off rights to radio bandwidth for 3G telecommunications in part to lower the government's deficit. The Indian Government seeks to reduce its deficit to 5.5% of GDP in FY 2010-11, down from 6.8% in the previous fiscal year. India's long term challenges include widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, insufficient access to quality basic and higher education, and accommodiating rual-to-urban migration.
GDP (purchasing power parity):
$4.046 trillion (2010 est.)
country comparison to the world: 5
$3.736 trillion (2009 est.)
$3.478 trillion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$1.43 trillion (2009 est.)
GDP - real growth rate:
8.3% (2010 est.)
country comparison to the world: 7
7.4% (2009 est.)
7.4% (2008 est.)
GDP - per capita (PPP):
$3,400 (2010 est.)
country comparison to the world: 164
$3,200 (2009 est.)
$3,000 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 16.1%
industry: 28.6%
services: 55.3% (2009)
Labor force:
478.3 million (2009 est.)
country comparison to the world: 2
Labor force - by occupation:
agriculture: 52%
industry: 14%
services: 34% (2009 est.)
Unemployment rate:
10.8% (2010 est.)
country comparison to the world: 118
10.7% (2009 est.)
Population below poverty line:
25% (2007 est.)
Household income or consumption by percentage share:
lowest 10%: 3.6%
highest 10%: 31.1% (2005)
Distribution of family income - Gini index:
36.8 (2004)
country comparison to the world: 79
37.8 (1997)
Investment (gross fixed):
32% of GDP (2009 est.)
country comparison to the world: 13
Budget:
revenues: $170.7 billion
expenditures: $257.4 billion (2009 est.)
Public debt:
55.9% of GDP (2010 est.)
country comparison to the world: 42
57.3% of GDP (2009 est.)
Inflation rate (consumer prices):
11.7% (2010 est.)
country comparison to the world: 205
10.9% (2009 est.)
Central bank discount rate:
6% (31 December 2009)
country comparison to the world: 74
6% (31 December 2008)
Commercial bank prime lending rate:
12.19% (31 December 2009 est.)
country comparison to the world: 59
13.31% (31 December 2008 est.)
Stock of narrow money:
$328.4 billion (31 December 2010 est)
$268.4 billion (31 December 2009 est)
Stock of broad money:
$1.29 trillion (31 December 2010 est.)
$1.04 trillion (31 December 2009 est.)
Stock of domestic credit:
$1.164 trillion (31 December 2010 est.)
country comparison to the world: 14
$938.8 billion (31 December 2009 est.)
Market value of publicly traded shares:
$1.179 trillion (31 December 2009)
country comparison to the world: 14
$645.5 billion (31 December 2008)
$1.819 trillion (31 December 2007)
Agriculture - products:
rice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish
Industries:
textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals
Industrial production growth rate:
9.7% (2009 est.)
country comparison to the world: 17
Electricity - production:
723.8 billion kWh (2009 est.)
country comparison to the world: 6
Electricity - consumption:
568 billion kWh (2007 est.)
country comparison to the world: 6
Electricity - exports:
810 million kWh (2009 est.)
Electricity - imports:
5.27 billion kWh (2009 est.)
Oil - production:
878,700 bbl/day (2009 est.)
country comparison to the world: 24
Oil - consumption:
2.98 million bbl/day (2009 est.)
country comparison to the world: 5
Oil - exports:
738,600 bbl/day (2007 est.)
country comparison to the world: 23
Oil - imports:
2.9 million bbl/day (2007 est.)
country comparison to the world: 6
Oil - proved reserves:
5.8 billion bbl (1 January 2010 est.)
country comparison to the world: 23
Natural gas - production:
38.65 billion cu m (2009 est.)
country comparison to the world: 22
Natural gas - consumption:
51.27 billion cu m (2009 est.)
country comparison to the world: 16
Natural gas - exports:
0 cu m (2008 est.)
country comparison to the world: 170
Natural gas - imports:
12.62 billion cu m (2009 est.)
country comparison to the world: 17
Natural gas - proved reserves:
1.075 trillion cu m (1 January 2010 est.)
country comparison to the world: 26
Current account balance:
-$26.91 billion (2010 est.)
country comparison to the world: 181
-$26.63 billion (2009 est.)
Exports:
$201 billion (2010 est.)
country comparison to the world: 22
$168.2 billion (2009 est.)
Exports - commodities:
petroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, apparel
Exports - partners:
UAE 12.87%, US 12.59%, China 5.59% (2009)
Imports:
$327 billion (2010 est.)
country comparison to the world: 13
$274.3 billion (2009 est.)
Imports - commodities:
crude oil, precious stones, machinery, fertilizer, iron and steel, chemicals
Imports - partners:
China 10.94%, US 7.16%, Saudi Arabia 5.36%, UAE 5.18%, Australia 5.02%, Germany 4.86%, Singapore 4.02% (2009)
Reserves of foreign exchange and gold:
$284.1 billion (31 December 2010 est.)
country comparison to the world: 6
$274.7 billion (31 December 2009 est.)
Debt - external:
$237.1 billion (31 December 2010 est.)
country comparison to the world: 28
$221.3 billion (31 December 2009 est.)
Stock of direct foreign investment - at home:
$191.1 billion (31 December 2010 est.)
country comparison to the world: 23
$157.9 billion (31 December 2009 est.)
Stock of direct foreign investment - abroad:
$89.04 billion (31 December 2010 est.)
country comparison to the world: 26
$76.62 billion (31 December 2009 est.)
Exchange rates:
Indian rupees (INR) per US dollar - 46.163 (2010), 48.405 (2009), 43.319 (2008), 41.487 (2007), 45.3 (2006)
 

street-vender.jpg (10985 bytes)India has been slowly progressing economically, due in part to political problems and the extreme climate.  The agrarian economic base has little by little been changing to one consisting of industry or commerce. 

Although India had a flourishing trade and cottage industry (where people work at home using their own tools or equipment), with Britain's arrival it was essentially ruined.  The British used the export of opium, cotton and tea to acquire the European items they desired.  Even though the British built railways (with Indian and British money) and irrigation it didn't help India's economy.  The economy stayed this way, not growing, the last thirty or so years of British rule. 

After India regained it's independence, it encouraged self sufficiency.  This was to built up India's industry and diminish it's foreign trade dependency.  Although things did improve, it wasn't enough, until the government lessened the states control of the economy during the 1970s.  The government was still in control over certain industries in the early nineties, and economic growth was achieved with the help of loans by foreign countries by 1991.  But this was also the same time of the Persian Gulf War, which was a financial blow to India with the skyrocketing price of oil

India is the seventh largest and second most populous country in the world. A new spirit of economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the country and stimulating foreign investment has moved India firmly into the front ranks of the rapidly growing Asia Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. 

India's process of economic reform is firmly rooted in a political consensus that spans her diverse political parties. India's democracy is a known and stable factor, which has taken deep roots over nearly half a century. Importantly, India has no fundamental conflict between its political and economic systems. Its political institutions have fostered an open society with strong collective and individual rights and an environment supportive of free economic enterprise.

India's time tested institutions offer foreign investors a transparent environment that guarantees the security of their long term investments. These include a free and vibrant press, a judiciary which can and does overrule the government, a sophisticated legal and accounting system and a user friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity. It accounts for over 75% of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations.

Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition.

 


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