The Indian economy has grown a little lesser than six times in less than two decades and currently it is the fifth largest economy in the world.
Overview of The Indian Economy
Being one of the largest populated (1.35 billion people) country in the world, India has now become the fifth largest economy in terms of nominal GDP ($2.93 trillion) in the world. Services sector contributes the maximum to the gross value added composition by sector.
For the first quarter of 2018-2019, India was the world’s fastest growing economy with a growth rate of 8.2%. If current trends continue it is expected that the economy would surpass the other nations on the rating scale.
Young working population, Rising levels of education and skills, Several development initiatives undertaken by the Government, providing higher competency to do business, and attracting investments are some of the driving forces for India’s rapid growth rates.
During the period 2000 -2018, FDI equity inflows in India stood highest from Mauritius (32%), Singapore (19%), Japan, United Kingdom and the Netherlands to sectors like services (17%), computer software (9%) and hardware, telecom, construction development and trading.
With an employment rate of 93.1% during 2018, India’s per capita GDP rose 36% in the past five years to $1,979.4 in 2017.
Besides the above, there are a few interesting facts about the Indian economy. Let’s discuss them in detail:
- Fastest Stock Exchange: The Bombay Stock Exchange (BSE) was established in 1875 and has more than 7,000 companies listed, one of the highest number across world markets. The exchange has now become the fastest exchange in the world with a median response time of 6 microseconds.
BSE’s popular equity index – the S&P BSE SENSEX – is India’s most widely tracked stock market benchmark index and is traded internationally on the EUREX. Also, it is traded on leading exchanges of the BRCS nations.
- Fifth Largest, yet smaller than California: California, the largest state economy of U.S., produced more than $3 trillion of economic output in 2019 higher than India’s $2.9 trillion.On the contrary, California’s labor force stood at 19.5 million compared to India’s labor force of 519 million. As a separate country, California is way ahead of economies like India, U.K., and France.
Also Read: 7 Biggest Threats to the US Economy
- Violence & Corruption costs to the economy: India’s rapid growth rates are dented by corruption at all government levels and by prevalent violence in most of the states. Studies reveal that without these issues the Indian economy would flourish more. In 2017 alone, an estimated more than $1 trillion was lost because of violence.
As per Transparency International, India continues to be among the most corrupt (81st rank) countries in the world with a score of 40 in the Corruption Perception Index.
Meanwhile, in 2017 Institute for Economics and Peace shows violence cost India $1.2 trillion (9% of GDP) with almost 822 incidents of communal violence.
- Agriculture accounts for 50% of jobs in India: With an area of almost 3.29 million sq.kms and a long coastline of 7,500 kms, India is the world’s largest producer of milk, pulses and jute, and ranks as the second largest producer of rice, wheat, sugarcane, groundnut, vegetables, fruit and cotton.
As per the Economic Survey 2017-18, agriculture sector employs more than 50% of the total workforce in India contributing almost 17% to 18% of GDP.
- Rural student spends more than urban student: As per a Economic Survey, a rural student expenses on books, stationery and uniform is over 10 percentage points higher than those in urban areas. Despite participation in education system remains same in both the classes, higher education and specialized courses have lesser students due to lack of financial support and high course fees.
- Easy to get gun licence than a Restaurant license: As per a National Restaurants Association of India (NRAI), 36 approvals are required to open a restaurant in Bengaluru, 26 in Delhi and 22 in Mumbai as compared to just four licenses in China and Singapore. On the contrary, Delhi Police will ask only for 19 documents to buy a gun.
- One of the highest gold reserves of world: As per the World Gold Council data, India has 618.2 tonnes of gold in holdings equivalent to 6.9% share held in gold in total foreign reserves. It holds the 10th position in the list which is led by U.S. with a holding of 8,133.5 tonnes.
- India added 3 billionaires a month in 2019: As per a Hurun Global Rich List 2020, among 2,817 individuals across the globe with net worth more than $1 billion, the world added 480 billionaires in 2019 with China adding more than three a week and India adding more than three billionaires a month. India’s total tally stood at 138 with China and U.S. topping the list.
In the total 34 new billionaires that India added, Mukesh Ambani tops the list with $67 billion in net worth. He is the ninth richest in the world list which is led by Jeff Bezos ($140 billion) of Amazon (NASDAQ: AMZN).
- India in the list of world’s most expensive mansions: Among the world’s most expensive mansions which is topped by the Buckingham Palace, Mumbai based Antilia owned by Mukesh Ambani stands second with a $1 billion valuation. In fact, Buckingham Palace is open to the public while Antilia is the world’s priciest private home.
According to The Guardian, the 27-story mansion completed in 2010, includes amenities like three helipads, a 50-seat movie theater and six floors of parking space that can accommodate 168 cars. To maintain all that, Ambani employs a staff reported to number 600.
- Every village has access to electricity: When Prime minister Narendra Modi took office in 2014, there were almost 18,452 villages without electricity. In 2018, government data reflected that all of India’s 597,464 census villages have now been electrified.
It stands a great achievement in the history of India and a key political plank for the ruling party.
- In a decade, India has lifted more than 270 million people out of poverty: A report by the United Nations said that India lifted 271 million people out of poverty between 2006 and 2016. This was the fastest reductions in the multidimensional poverty index values during the period with strong improvements in areas such as “assets, cooking fuel, sanitation and nutrition.
India’s global Multidimensional Poverty Index (MPI) in 2019 stood at 0.123 in 2015-2016 compared to 0.283 in 2005-2006