Economy of India
From Wikipedia, the free encyclopedia
The economy of India has transitioned from a mixed planned economy to a mixed middle-income developing social market economy with notable public sector in strategic sectors.[44] It is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 136th by GDP (nominal) and 125th by GDP (PPP).[45] From independence in 1947 until 1991, successive governments followed Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat driven enterprises and economic regulation. This is characterised as dirigism, in the form of the Licence Raj.[46][47] The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning.[48][49] Since the start of the 21st century, annual average GDP growth has been 6% to 7%.[44] The economy of the Indian subcontinent was the largest in the world for most of recorded history up until the onset of colonialism in early 19th century.[50][51][52]
Currency | Indian rupee (INR, ₹) |
---|---|
1 April – 31 March | |
Trade organisations | WTO, WCO, SAFTA, BIMSTEC, WFTU, BRICS, G-20, BIS, AIIB, ADB and others |
Country group | |
Statistics | |
Population | 1,428,627,663 (1st; 2024 est.)[5] |
GDP | |
GDP rank | |
GDP growth | |
GDP per capita | |
GDP per capita rank | |
GDP by sector |
|
GDP by component |
|
| |
6.50% (9th February 2024)[10] | |
Population below poverty line | |
| |
39 (2023)[16] (93rd) | |
Labour force | |
Labour force by occupation | |
Unemployment | |
Gross savings | 29.345% of GDP (2022)[24] |
10-year bond 7.190% (Jan 2023)[25][26] | |
Main industries | |
External | |
Exports | $776.68 billion (FY2023-24)[30] |
Export goods |
|
Main export partners |
|
Imports | $854.80 billion (FY2023-24)[30] |
Import goods |
|
Main import partners |
|
FDI stock | |
Gross external debt |
|
–$379.7 billion (June 2023)[37] | |
Public finances | |
6.4% of GDP (2022–23)[38] | |
Revenues | |
Expenses | |
Economic aid |
|
$648.562 billion[lower-alpha 2][43] (4th) (as of 5 April 2024) | |
All values, unless otherwise stated, are in US dollars. |
Nearly 70% of India's GDP is driven by domestic consumption;[53] country remains the world's fourth-largest consumer market.[54] Apart from private consumption, India's GDP is also fueled by government spending, investments, and exports.[55] In 2022, India was the world's 8th-largest importer and the 10th-largest exporter.[56] India has been a member of the World Trade Organization since 1 January 1995.[57] It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index.[58] With 476 million workers, the Indian labour force is the world's second-largest.[59] India has one of the world's highest number of billionaires and extreme income inequality.[60][61]
During the 2008 global financial crisis, the economy faced a mild slowdown. India endorsed Keynesian policy and initiated stimulus measures (both fiscal and monetary) to boost growth and generate demand. In subsequent years, economic growth revived.[62] The period between 2004 and 2014 is referred to as India's lost decade as India fell behind other BRIC economies.[63][64]
In 2021–22, the foreign direct investment (FDI) in India was $82 billion. The leading sectors for FDI inflows were the service sector, the computer industry, and the telecom industry.[65] India has free trade agreements with several nations and blocs, including ASEAN, SAFTA, Mercosur, South Korea, Japan, Australia, UAE, and several others which are in effect or under negotiating stage.[66][67]
The service sector makes up more than 50% of GDP and remains the fastest growing sector, while the industrial sector and the agricultural sector employs a majority of the labor force.[68] The Bombay Stock Exchange and National Stock Exchange are some of the world's largest stock exchanges by market capitalisation.[69] India is the world's sixth-largest manufacturer, representing 2.6% of global manufacturing output.[70] Nearly 65% of India's population is rural,[71] and contributes about 50% of India's GDP.[72] India faces high unemployment, rising income inequality, and a drop in aggregate demand.[73][74] India's gross domestic savings rate stood at 29.3% of GDP in 2022.[75] In recent years, independent economists and financial institutions have accused the government of manipulating various economic data, especially GDP growth.[76][77] India's overall social spending as a share of GDP in 2021–22 will be 8.6%, which is much lower than the average for OECD nations.[78][79]