India, the second-most populous nation in the world, is also one of the largest and fastest-growing economies in the globe. The economic growth along with various factors including a large pool of youth population and proficiency in a global language like English is expected to propel the country into becoming a developed economy. The ruling Narendra Modi government has set the ambitious target of taking the economy to $5 trillion in the next five years from $3 trillion.
Here are some interesting facts about the Indian economy:
Fastest growing economy
India is the seventh-largest economy in the globe in terms of nominal GDP and continued to be the fasted growing economy with annual gross domestic product (GDP) growth of 6.8 percent in the fiscal year 2018-19. The government's economic survey has predicted 7 percent GDP growth in the financial year 2020.
The country, since the liberalization policy of 1991, is consistently showing a steady growth rate, clocking an annual growth rate close to the 7 percent mark. The high growth is expected to help the country in becoming the second largest global economy by the middle of this century. The country is also the third-largest global economy on account of purchasing power parity.
India's services sector contributed 54.17 percent of India’s gross value added at current price in 2018-19, according to a report by Indian Brand Equity Foundation. Net service exports stood at $ 60.25 billion in April-December 2018.
The Nikkei/IHS Markit Services Purchasing Managers' Index stood at 50.2 in May, its lowest since May 2018 and only a touch above the 50-mark that separates contraction from growth.
The growth in the sector has also aided in making the country one of the biggest tech hubs on the planet. The country’s IT industry, which also includes BPO and software services is also one of the key source of foreign revenue besides being the largest job provider in the private sector. It has also enabled in making the country one of the largest startup hubs on the planet.
Agriculture is still the backbone of the economy
But despite the steady progress made, particularly in the service sector, agriculture still continues to be the backbone on which the entire system rides on. The sector, along with its allied sectors like forestry, logging and fishing account for nearly a fifth of the country’s total GDP. They also are a source of employment for more than half of the country’s total workforce.
Challenges in the micro-level economic progress
Despite being one of the largest economies overall in terms of GDP, the nation has not been successful in maintaining this same levels of achievement at the ground level. The country is ranked 139th when it comes to per capita GDP. Also when you assess individual purchasing parity the ranking of the country 119.
Positive growth outlook
Despite several challenges face by the economy starting from a rising population, that is all set to be the biggest in the planet, an outdated and often unproductive bureaucratic machinery and administrative hurdles the general consensus among experts is that the country will continue to maintain its growth. Several factors such as young population, English proficiency, corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy etc have influenced this positive outlook.
Tackling issues hindering the growth
The Indian economy is steadily taking steps aimed at tackling various issues that are thwarting overall progress. From tackling issues hindering social justice such as gender gap, wage disparity inequality to taking on macro-level issues such as the presence of a complicated taxation system, the country is steadily making giant steps.