India’s Economy has grown by more than 9% for three years running, and has seen a decade of 7%+ growth. This has reduced poverty by 10%, but with 60% of India’s 1.1 billion population living off agriculture and with droughts and floods increasing, poverty alleviation is still a major challenge.
The structural transformation that has been adopted by the national government in recent times has reduced growth constraints and contributed greatly to the overall growth and prosperity of the country. However there are still major issues around federal vs state bureaucracy, corruption and tariffs that require addressing. India’s public debt is 58% of GDP according to the CIA World Fact book, and this represents another challenge.
During this period of stable growth, the performance of the Indian service sector has been particularly significant. The growth rate of the service sector was 11.18% in 2007 and now contributes 53% of GDP. The industrial sector grew 10.63% in the same period and is now 29% of GDP. Agriculture is 17% of the Indian economy.
Growth in the manufacturing sector has also complemented the country’s excellent growth momentum. The growth rate of the manufacturing sector rose steadily from 8.98% in 2005, to 12% in 2006. The storage and communication sector also registered a significant growth rate of 16.64% in the same year.
Additional factors that have contributed to this robust environment are sustained in investment and high savings rates. As far as the percentage of gross capital formation in GDP is concerned, there has been a significant rise from 22.8% in the fiscal year 2001, to 35.9% in the fiscal year 2006. Further, the gross rate of savings as a proportion to GDP registered solid growth from 23.5% to 34.8% for the same period.
| Economy of India | |
 |
|
| Currency | 1 Indian Rupee (INR) (₨) = 100 Paise |
|---|---|
| Fiscal year | April 1–March 31 |
| Trade organisations | WTO, SAFTA |
| Statistics | |
| GDP (PPP) | $5.21 trillion (PPP) (2008 est.) (3rd) |
| GDP growth | 9.6% (2006/07) |
| GDP per capita | $978 (nominal); $2,659 (PPP) [7] |
| GDP by sector | agriculture: 19.9%, industry: 19.3%, services: 60.7% (2006 est.) |
| Inflation (CPI) | 12.01% (26 July 2008)[1] |
| Population below poverty line | 25% (2002 est.) [8] |
| Labour force | 509.3 million (2006 est.) |
| Labour force by occupation | agriculture: 60%, industry: 12%, services: 28% (2003) |
| Unemployment | 7.8% (2006 est.) |
| Main industries | textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, services |
| External | |
| Exports | $125 billion (Financial Year 2006-2007) |
| Export goods | textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures, services |
| Main export partners | US 18%, the People's Republic of China 8.9%, UAE 8.4%, UK 4.7%, Hong Kong 4.2% (2005) |
| Imports | $187.9 billion f.o.b. (2006 est.) |
| Import goods | crude oil, machinery, gems, fertilizer, chemicals |
| Main import partners | the People's Republic of China 7.2%, US 6.4%, Belgium 5.1%, Singapore 4.7%, Australia 4.2%, Germany 4.2%, UK 4.1% (2005) |
| Public finances | |
| Public debt | $132.1 billion (2006 est.) |
| Revenues | $109.4 billion (2006 est.) |
| Expenses | $143.8 billion; including capital expenditures of $15 billion (2006 est.) |
| Economic aid | donor: $17.3 million (2006) |
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India has emerged as the fourth largest economy globally with a high growth rate and has improved its global ranking in terms of per capita income. But the recent survey says that in the year 2011-12, Indian economic growth slip to 6.9%. At 6.9 per cent, it will be the slowest pace of growth for the Indian economy since 2008.
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