Economy of India

Economy of India ¹
Currency	1 Indian Rupee (Re) = 100 paise
Fiscal year	1 April - 31 March
Trade Organisations	SAFTA, ASEAN and WTO
Statistics
GDP Ranking	4th
GDP	$3.033 trillion
GDP real growth rate	8.3%
GDP per Capita	$2,900
GDP by sector	agriculture (23.6%), industry (28.4%), services (48%)
Inflation rate	3.8%
Population below poverty line	25%
Labour force	472 million
Labour force by occupation (1999)	agriculture (60%), industry (17%), services (23%)
Unemployment rate	9.5%
Agriculture products	rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes; cattle, water buffalo, sheep, goats, poultry; fish
Main Industries	textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software
External Trade
Imports (2003)	$74.15 billion
Major Imported commodities	crude oil, machinery, gems, fertilizer, chemicals
Main Partners (2003)	USA 6.4%, Belgium 5.6%, UK 4.8%, China 4.3%, Singapore 4%
Exports	$57.24 billion
Major Exported Commodities	textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures
Main Partners (2001)	USA 20.6%, China 6.4%, UK 5.3%, Hong Kong 4,8%, Germany 4.4%
Public Finances
Public Debt	$1.810701 billion (59.7% of GDP)
External Debt	$101.7 billion
Revenues	$86.69 billion
Revenue Expenditure	$101.1 billion
Capital Expenditure	$13.5 billion
Economic Aid receipts (1998/99)	$2.9 billion

India has had robust economic growth since 1991 when the government reversed its socialist-inspired policy of a large public sector with extensive controls on the private sector and began to liberalize the economy. Liberalization has proceeded in fits and starts since then, mainly due to political pressures, but the economy has responded well by posting strong growth in many sectors. A certain amount of dissatisfaction is expressed in the face of these changes in the Indian economy- some of which are that a quarter of the population is still too poor to be able to afford an adequate diet, electricity shortages still continue in many regions and the manufacturing sector has slowed down at the expense of soft skills. With a GDP of 568 billion (B$) ($3.096 trillion (T$) at PPP) India has the world's 12th largest economy (and the 4th largest when adjusted for PPP). However, the large population means that per capita income is quite low. In 2003 the World Bank ranked India 143rd in PPP per capita income and 160th in real terms, among 208 countries.

Composition

About 60% of the population depends directly on agriculture. Industry and services sectors are growing in importance and account for 25% and 15% of GDP, respectively, while agriculture contributes about 25.6% of GDP. More than 25% of the population live below the poverty line, but a large and growing middle class of 300 million has disposable income for consumer goods.

Economic Reforms

India embarked on a series of economic reforms in 1991 in reaction to a severe foreign exchange crisis. Those reforms have included liberalized foreign investment and exchange regimes, significant reductions in tariffs and other trade barriers, reform and modernization of the financial sector, and significant adjustments in government monetary and fiscal policies. The reform process has had some very beneficial effects on the Indian economy, including higher growth rates, lower inflation, and significant increases in foreign investment. Foreign portfolio and direct investment flows have risen significantly since reforms began in 1991 and have contributed to healthy foreign currency reserves (119 B$ in July 2004) and a moderate current account deficit of about 1% (2002-03). India's economic growth is constrained, however, by inadequate infrastructure, cumbersome bureaucratic procedures, and high real interest rates. India will have to address these constraints in formulating its economic policies and by pursuing the second generation reforms to maintain recent trends in economic growth.

Liberalisation

Significant liberalization of her investment regime since 1991 has made India an attractive place for foreign direct and portfolio investment. The U.S. is India's largest investment partner. Since 1991, Indian economy has gone from strength to strength. It has recorded a growth rate of above 5%. India's economy grew at an unexpectedly robust 8.4 percent in the year through the third quarter of 2004, making it one of the fastest growing in the world.

Taxation

Revenues earned by the Central Indian Government: Figures in crore rupees for April-Sep 04. Note: 1 crore=10 million. 43 rupees=1 $ as of January 5, 2004.

Excise duty: 36,622
Customs: 25,205
Income tax: 25,175
Corporation tax: 20,337

Other Statistics

Household income or consumption by percentage share:
lowest 10%: 3.5%
highest 10%: 33.5% (1997) Electricity - production: 533.3 TWh (2001 est.) Electricity - production by source:
fossil fuel: 81.7%
hydro: 14.5%
nuclear: 4.4%
other: 0.4% (2001) Electricity - consumption: 497.2 TWh (2001) Electricity - exports: 321 GWh (2001) Electricity - imports: 1.54 TWh (2001)