Statistics & Growth Rate of Indian Economy.

India’s economy is a mixed, evolving social market economy with middle-income levels. By nominal GDP, it is the fifth-largest economy in the world, and by purchasing power parity, it is the third-largest (PPP). India ranked 125th by nominal GDP and 142nd by nominal GDP in terms of per capita income, respectively, according to the International Monetary Fund (IMF) (PPP). Successive governments advocated protectionist economic policies with significant state intervention and economic regulation from the time of independence in 1947 until 1991. This is referred to as the License Raj, a kind of dirigism.

At the time of the nation’s impending independence, the Indian economy was in trouble. As a colony, she was serving the demands of another country’s development rather than her own. The state, which ought to have been in charge of innovations in agriculture and industry, declined to take even a little part in this. On the other hand, the world experienced accelerated development and expansion in agriculture and industry during the 50 years before to India’s independence, thanks to the states’ active participation.

The adoption of a comprehensive economic liberalisation in India was prompted by the end of the Cold War and a severe balance of payments crisis in 1991. Since the beginning of the twenty-first century, annual average GDP growth has ranged from 6% to 7%, and from 2013 to 2018, India’s major economy outpaced China in terms of its rate of expansion. For the majority of recorded history, up to the start of colonisation in the early 19th century, the Indian subcontinent had the greatest economy in the world. According to PPP, India’s economy accounts for 7.5% of the global economy.

Due to its young population and low dependency ratio, robust savings and investment rates, growing globalization in India, and integration into the global economy, the long-term economic outlook of the Indian economy remains good. Due to the shocks of “demonetization” in 2016 and the implementation of the Goods and Services Tax in 2017, the economy slowed down. India’s GDP is mostly driven by domestic private spending, at around 70%. The nation continues to be the sixth-largest consumer market in the globe. India’s GDP is supported by government expenditure, investments, and exports in addition to private consumption. Due to the pandemic, India was the world’s 14th-largest importer and 21st-largest exporter in 2020. 

Since 1 January 1995, India has belonged to the World Trade Organization. It comes in at number 68 on the Global Competitiveness Report and number 63 on the Ease of Doing Business index. Due to the enormous variations in the rupee/dollar exchange rate, India’s nominal GDP also varies greatly. The second-largest labour force in the world is found in India, where there are 50 crore (500 million) employees. India is among the countries with the largest percentage of billionaires and the greatest income disparity. Only 2% of Indians pay income taxes due to several exclusions.

The global financial crisis of 2008 caused a slight downturn in the economy. India implemented fiscal and monetary stimulus measures to increase GDP and create demand. Later years saw a recovery in economic growth. India must prioritise public sector reform, infrastructure, agricultural and rural development, the abolition of land and labour regulations, financial inclusion, encouraging private investment and exports, education, and public health, according to the World Bank, in order to achieve sustainable economic growth.

The industrial and agricultural sectors employ the majority of the labour force, while the service sector, which accounts for 50% of GDP, continues to grow at the highest rate. Some of the largest stock exchanges in the world by market capitalization include the Bombay Stock Exchange and the National Stock Exchange. With 2.6% of the world’s industrial output, India ranks as the sixth-largest producer. Rural areas in India make up over 66% of the population and generate roughly 50% of the country’s GDP. Its $588,314 billion in foreign exchange reserves rank fourth in the entire world.

India’s budget deficit was 6.7% of GDP, while its public debt was high at 86% of GDP. Low loan growth was caused by the rising bad debt that India’s government-owned banks were dealing with. The NBFC industry has also been hit by a liquidity crunch at the same time. India is dealing with a reduction in overall demand, a rise in income disparity, and moderate unemployment. In FY 2020, India’s gross domestic savings as a percentage of GDP was 31.38. Independent economists and financial organisations have charged the government in recent years with falsifying economic data, particularly GDP growth.

Over 50% of the world’s demand for vaccinations is met by the pharmaceutical industry in India, which is also the largest producer of generic pharmaceuticals. The Indian IT sector generates $196 billion in sales, employs over 4.47 million people, and is a significant exporter of IT services.  India’s chemical sector is thought to be worth $178 billion and is very diverse.  About 9.2% of India’s GDP comes from the tourist sector, which also employs over 4.2 crore (42 million) people.  India produces the second-most food and agricultural products in the world, and its $35.09 billion in agricultural exports.

Economic activity in India is holding up better than expected despite persistent geopolitical worries, rising interest rates in the US and India, high prices for crude oil and a few other commodities, and rising interest rates in both countries. The rate of economic activity has entirely recovered from the COVID-19 pandemic shock, according to electricity consumption, manufacturing PMI, exports, power supply, and other high-frequency indicators. The efficient execution of PLI schemes, the expansion of renewable energy sources while diversifying import dependency on crude oil, and the support of the banking sector are expected to propel economic growth.

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