Economy of IndiaEssay Preview: Economy of IndiaReport this essayNovember 5, 2005Economic Growth and DevelopmentEconomy of IndiaThe economy of India has seen an explosive amount of growth during the past few years. Indias economy is the fourth largest in the world in terms of purchasing power parity (PPP) followed by a Gross Domestic Product of $3.3 trillion. India also has 8.1% Gross Domestic Product growth rate, which is second in the world (Economy of India 2005).
India was the second fastest growing major economy in the world, with a GDP growth rate of 8.1% at the end of the first quarter of 2005-06. However, Indias huge population results in a relatively low per capita income of $3,100 at PPP (Economy of India 2005).
India has an extremely diverse economy which includes many areas in agriculture, crafts, major industries and numerous miscellaneous services. The leading economic growth vehicle in India would be its multitude of services, however two-thirds of the workforce in India earn their income through agriculture. The labor force of India is estimated to be around 482.2 million people with 57% in agriculture, 17% in industry, and 23% in other services (Economy of India 2005).
In recent times, India has also capitalised on its large number of highly educated people who are fluent in the English language to become a major exporter of software services, financial services and software engineers (Economy of India 2005).
Since Indias independence it has adopted to a socialist government which has led to government control over all aspects of the economy. This includes strict policies over the private sector, foreign trade as well as direct foreign investment in India. However, India has recently developed new economic reforms that have limited the governments control on foreign investment and trade. These reforms have allowed the markets to be more open and accessible
for future investors and entrepenuers (Economy of India 2005).The socio-economic problems India faces are a burgeoning population and lack of infrastructure, as well as growing inequality and unemployment. Poverty also remains a problem although
it has seen a decrease of 10% since the 1980s. Indias economic history can be broadly compartmentalised into three eras, beginning with the pre-colonial period lasting up to the 17th century. The advent of British colonisation of the Indian subcontinent started the colonial period in the 17th century, which ended with the Indian independence in 1947. The third period is the post-independence period after 1947 (Economy of India 2005).
Indias growth rate of real GDP per capita(1950-2004)Growth rate of Indias real GDP per capita (Constant Prices: Chain series) (1950-2000).Data Source: Penn World tables.In 1947 India gained its indepeendence and started to develop its economic structure as well as its government. During this period India was extremlly poor and cosumed with viloence and economic instability. Since the late nineteenth century the economy of India had become stagnate with no signs of industrial development (Economy of India: Analysis, Character and Structure 2000).
In fiscal year 1950, agriculture, forestry, and fishing accounted for 58.9 percent of the gross domestic product and for a much larger proportion of employment. Manufacturing, which was dominated by the jute and cotton textile industries, accounted for only 10.3 percent of GDP at that time (Economy of India: Analysis, Character and Structure 2000).
During the 1950s India maintained somewhat steady economic growth in both private and public sectors of the economy. The established government leaders after independence wanted desperately to improve economic growth directly and develop agendas to respond to the poverty that had consumed India. The government felt the need for India to become more self-sufficient rather than rely on foreign investment and trade. This led to a split in the public and private sectors of the economy. The private sector which was controlled by the government and large private investors produced the majority of consumer goods. The public sector controlled the large industries, telecommunications, and transportation systems of India. During the 1970s India began to addressee the immense state control of the economy and sought to find ways of reducing government control. In the 1980s India experience greater than average foreign aid to help funding in numerous development plans throughout the country (Economy of India: Analysis, Character and Structure 2000).
As a result, when the price of oil rose sharply in August 1990, the nation faced a balance of payments crisis. The need for emergency loans led the government to make a greater commitment to economic liberalization than it had up to this time.
In the early 1990s, Indias post-independence development pattern of strong centralized planning, regulation and control of private enterprise, state ownership of many large units of production, trade protectionism, and strict limits on foreign capital was increasingly questioned not only by policy makers but also by most of the intelligentsia (Economy of India: Analysis, Character and Structure 2000).
Private and public industry employment in India(2003)No. of persons employed in non-agricultural occupations in Public and Private Sectors.Data source: Economic Survey (2004-05)Indias current population has continued to grow at a remarkable rate and is estimated at 1.027 billion people and has an annual growth rate of around 1.93% (1991-2001). This is down somewhat from an annual growth rate of 2.15% during 1951-1981. While the Gross Domestic Product of India is considered low in dollar terms, India is however ranked 13th in the world for largest Gross National Product. Estimates of around 62% of Indias total population depend directly or indirectly on agriculture output and products (Economy of India: Analysis, Character and Structure 2000).
The GDP of India had increased from $15.1 billion in 2003 to $19.1 billion in April 2009. Inflation is also extremely low in India, averaging 1% per annum. Income distribution of rich and poor has stagnated for two decades and is in absolute terms below the national average of 1%. Inflation has been extremely high and this has forced some families to close offices. 1.6 million people are now working in agriculture only to be forced out just as quickly. 1.6 million workers from the previous generation lost their jobs in 2014, while this is still 2% of the working population. As of June, there were only a quarter of an adult working in agriculture in India while this number was about 50% of the total. In 2003, the ratio in the Indian labor force was 5:1, the population working in agriculture was 17% and the population in the non-agricultural industry was 31%. In 2011, both the birth rate of young children and the number of adult men aged 70+ had increased substantially at the same time. According to the government’s 2013 National Household Survey, in 2013, the adult population worked 41.1 million hours and in 1984, the number held 41 million hours. It may be that in 2013, the adult population worked about 42.2 million hours during the period, when they increased to 45 million hours. This ratio may reflect that in 2013, the adults in 2013 paid a higher percentage of their GDP incomes in agricultural work than they did in 1984 in India. 2:3 ratio.
In some agriculture sectors, the economic situation is not so bad. In fact, the economic growth rate has been relatively flat since the industrialization of the country. In fact the rate of growth in 2015 from 2003-2013 is just 0.9%, which is a very good rate compared to India. This is the same year that the number of Indians in agriculture worked in full time by 2000. The growth in agriculture and manufacturing declined by 2.4%, and at 4.3.4 for each year, there are now 1.8 million in agriculture. However, the share of the country’s workforce is only 4%. The number of high-skilled Indian workers was much smaller in India in 2004 despite there being a large number of non-skilled Indian workers. In 2015, non-skilled Indian workers accounted for one-fifth of the country’s agricultural workforce but for an inflation rate of 0.3%, agriculture has gone from 16% (2006) to only 2% (2012). The non-farmers accounted for 1.3% of the workforce in agriculture, while the number of high-skilled or part-time professionals in agriculture accounted for 13%.
The growth in economic growth in agriculture has not improved substantially since the late 1960s, however, as the Indian economy shrank for
The GDP of India had increased from $15.1 billion in 2003 to $19.1 billion in April 2009. Inflation is also extremely low in India, averaging 1% per annum. Income distribution of rich and poor has stagnated for two decades and is in absolute terms below the national average of 1%. Inflation has been extremely high and this has forced some families to close offices. 1.6 million people are now working in agriculture only to be forced out just as quickly. 1.6 million workers from the previous generation lost their jobs in 2014, while this is still 2% of the working population. As of June, there were only a quarter of an adult working in agriculture in India while this number was about 50% of the total. In 2003, the ratio in the Indian labor force was 5:1, the population working in agriculture was 17% and the population in the non-agricultural industry was 31%. In 2011, both the birth rate of young children and the number of adult men aged 70+ had increased substantially at the same time. According to the government’s 2013 National Household Survey, in 2013, the adult population worked 41.1 million hours and in 1984, the number held 41 million hours. It may be that in 2013, the adult population worked about 42.2 million hours during the period, when they increased to 45 million hours. This ratio may reflect that in 2013, the adults in 2013 paid a higher percentage of their GDP incomes in agricultural work than they did in 1984 in India. 2:3 ratio.
In some agriculture sectors, the economic situation is not so bad. In fact, the economic growth rate has been relatively flat since the industrialization of the country. In fact the rate of growth in 2015 from 2003-2013 is just 0.9%, which is a very good rate compared to India. This is the same year that the number of Indians in agriculture worked in full time by 2000. The growth in agriculture and manufacturing declined by 2.4%, and at 4.3.4 for each year, there are now 1.8 million in agriculture. However, the share of the country’s workforce is only 4%. The number of high-skilled Indian workers was much smaller in India in 2004 despite there being a large number of non-skilled Indian workers. In 2015, non-skilled Indian workers accounted for one-fifth of the country’s agricultural workforce but for an inflation rate of 0.3%, agriculture has gone from 16% (2006) to only 2% (2012). The non-farmers accounted for 1.3% of the workforce in agriculture, while the number of high-skilled or part-time professionals in agriculture accounted for 13%.
The growth in economic growth in agriculture has not improved substantially since the late 1960s, however, as the Indian economy shrank for
The GDP of India had increased from $15.1 billion in 2003 to $19.1 billion in April 2009. Inflation is also extremely low in India, averaging 1% per annum. Income distribution of rich and poor has stagnated for two decades and is in absolute terms below the national average of 1%. Inflation has been extremely high and this has forced some families to close offices. 1.6 million people are now working in agriculture only to be forced out just as quickly. 1.6 million workers from the previous generation lost their jobs in 2014, while this is still 2% of the working population. As of June, there were only a quarter of an adult working in agriculture in India while this number was about 50% of the total. In 2003, the ratio in the Indian labor force was 5:1, the population working in agriculture was 17% and the population in the non-agricultural industry was 31%. In 2011, both the birth rate of young children and the number of adult men aged 70+ had increased substantially at the same time. According to the government’s 2013 National Household Survey, in 2013, the adult population worked 41.1 million hours and in 1984, the number held 41 million hours. It may be that in 2013, the adult population worked about 42.2 million hours during the period, when they increased to 45 million hours. This ratio may reflect that in 2013, the adults in 2013 paid a higher percentage of their GDP incomes in agricultural work than they did in 1984 in India. 2:3 ratio.
In some agriculture sectors, the economic situation is not so bad. In fact, the economic growth rate has been relatively flat since the industrialization of the country. In fact the rate of growth in 2015 from 2003-2013 is just 0.9%, which is a very good rate compared to India. This is the same year that the number of Indians in agriculture worked in full time by 2000. The growth in agriculture and manufacturing declined by 2.4%, and at 4.3.4 for each year, there are now 1.8 million in agriculture. However, the share of the country’s workforce is only 4%. The number of high-skilled Indian workers was much smaller in India in 2004 despite there being a large number of non-skilled Indian workers. In 2015, non-skilled Indian workers accounted for one-fifth of the country’s agricultural workforce but for an inflation rate of 0.3%, agriculture has gone from 16% (2006) to only 2% (2012). The non-farmers accounted for 1.3% of the workforce in agriculture, while the number of high-skilled or part-time professionals in agriculture accounted for 13%.
The growth in economic growth in agriculture has not improved substantially since the late 1960s, however, as the Indian economy shrank for
Composition of indias agricultural output in 2003-04Composition of Indias total production (million tonnes) of foodgrains and commercial crops, in 2003-04.Industry and services sectors are growing in importance and account for 26% and 48% of GDP,