Economics 101 - India
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The Economy of India 101
First Published: June 19, 2010 ADawnJournal.com
India is a growing giant, just like China to the north and that has many investors looking at India as a possibility for investment. However, many do not know much about India, nor it’s economy. To help, here are some things that you should know about the economy of India, a growing giant of Southeast Asia.
First of all, the economy of India is the 11th largest in the world and moving up fast. In addition, it has the fourth-largest economy based on the purchasing power parity. The economy of India has gone through many changes, and it grew slowly until the 1990s when the economy shifted based on reforms. As a result, with vast human resources and a massive amount of resources, most economists feel that by 2020, India will have one of the most powerful economies on the entire planet.
From independence in 1947, to 1991, the economy of India was one of protectionism, public ownership, extensive regulation, massive amounts of corruption and very slow growth. However, the liberalization of the economy in 1991 has changed things dramatically. Now, the economy is more of a market-based economy, which has caused many economic booms for the country since then. India now has one of the fastest growing economies on the planet, putting it on par for growth with its northern neighbour; China. While the 2009 Economic Crisis did cause a slow down, it only slowed the economy down to a growth rate of 6.1 percent, which is still excellent.
India’s economy is based largely on the service industry, which accounts for 62.5 percent of the country’s GDP, while agriculture and industry make up 17.5 percent and 20 percent. The labour force of the country is truly massive, pushing 500,000,000 people, which is more than nearly all the countries of the world have themselves, minus China, which has a larger population.
While India does have a growing economy, that puts it 11th in the world, the per capita income of the country is only $1,030, which puts it 139th on Earth. In addition, it’s per capita of $2,940 ranks 128th in the world. As of 2007, the country accounts for 1.5 percent of the entire trade of the world. In 2006, the last year for figures, the merchandise trade, which includes both exports and imports, was $294 billion. The service trade exports and imports are valued at $143, which puts the total import and export amounts of the country at $437 billion, which is 72 percent higher than the $253 billion the country had only two years previously. Trade continues to grow as an income source for the country, from six percent in 1985 to 24 percent in 2006.
India is a country on the grow, and that has many investors looking to it as a place to invest in the future, as the country makes more and more in the coming years. While there are still some problems to work out, the country is clearly on the right track.
