The Indian economy is the third largest in the world in purchasing power parity and ninth largest by nominal GDP criterion. .Goldman Sachs have predicted that by 2035,the Indian economy will be the third largest, behind USA and China. The economy would be as large as 60% of US economy. In 2011, the per capita income was $ 3073, making it relatively a lower middle class economy.
The year 1991 is a watershed year in Indian economy. In the budget of 91-92, the then Finance Minister and now the Prime Minister, Dr ManMohan Singh, liberated the economy from the tight controlsand finished the era of licensing. Also introduced were economic reforms esp. in the banking sector. The international trade was both liberalized and made very simple to operate. This brought out the enterprising spirit of the Indians to the fore and Indian economy began to grow at both high and healthy rates. This made both the country and the Indians attain higher incomes resulting in the country’s foreign exchange reserves reaching to a figure of app.$300 billion presently from a distressing reserve of $ 1 Bn in 1990-91.
Today India is one of the fastest growing economies in the world. This growth has led to an increase in the purchasing power of the people and is reflected in the variety of merchandise available at a vast range of prices, unthinkable say in the early nineties. The present growth rate is around 7% down from 8.5% a year ago due to overall dip inthe global economic scenario. India is the fourteenth largest exporter and eleventh largest importer in the world.
The rise of service industry in India has been a major development and today it forms nearly 60% of the total economy(GDP). The industrial and agricultural sectors contribute app. 27% and 13% resp. However nearly 46% of Indians are involved in agriculture, 34% in service sector and 14%in industrial sector. The Indian labor force is nearly 500 million strong.
The share of India in world trade has now reached 2%, up from 1.5%, in 2007. The estimated exports in 2011 were around $298.2 Bn and est. imports were around $ 451Bn. The main export countries are USA,UAE,China,Hong Kong and major imports are from China, UAE, Saudi Arabia, US and Australia. Petroleum products are a large part of our imports including defence purchases.
India’s GDP in 2011 was around $ 1.84 trillion in nominal terms and $4.47 trillion in purchase parity price terms. The current inflation is around 6.95%. Nearly 37% of the population is below poverty level and estimated unemployment rate is 9.8%.
India’s public debt is estimated to be around 62.5% of the GDP. The current budget deficit is around 5.9%.
India can hope to continue growing at a healthy rate of nearly 8% and more provided leadership is good and corruption is reduced. The Indians have the capability to once again reach the share of nearly 25% of the global trade and more before the Industrial revolution and England did us in,in the seventeenth century onwards.