Economy of India

"Dollar" and "$" refer throughout to the US dollar

The Economy of India is the ninth largest in the world by nominal GDP and the third largest by purchasing power parity (PPP).^[1] The country is one of the G-20 major economies and a member of BRICS. In 2011, the country's GDP PPP per capita was $3,703 IMF, 127^th in the world, thus making a lower-middle income economy.^[10]

During the 18th century India's Economy was the worlds major economy,more then the whole Europe ^[11] combined but due to lack of poor administration,had a downfall after entering of the British Government. After the independence-era Indian economy (before and a little after 1947) was inspired by the Soviet model of economic development, with a large public sector, high import duties combined with interventionist policies, leading to massive inefficiencies and widespread corruption. However, later on India adopted free market principles and liberalized its economy to international trade under the guidance of Manmohan Singh, who then was the Finance Minister of India under the leadership of P.V.Narasimha Rao the then Prime Minister. Following these strong economic reforms, the country's economic growth progressed at a rapid pace with very high rates of growth and large increases in the incomes of people.^[12]

India recorded the highest growth rates in the mid-2000s, and is one of the fastest-growing economies in the world. The growth was led primarily due to a huge increase in the size of the middle class consumer, a large labor force and considerable foreign investments. India is the fourteenth largest exporter and eleventh largest importer in the world. Economic growth rates are projected at around 7.5% for the 2011-12 fiscal year.^[13]

Overview

A combination of protectionist, import-substitution, and Fabian socialist-inspired policies governed India for sometime after India's Independence from the British. The economy was then characterised by extensive regulation, protectionism, public ownership, pervasive corruption and slow growth.^[14][15] Since 1991, continuing economic liberalisation has moved the country towards a market-based economy.^[14][15] By 2008, India had established itself as one of the world's fastest growing economies. Growth significantly slowed to 6.79% in 2008–09, but subsequently recovered to 7.4% in 2009–10, while the fiscal deficit rose from 5.9% to a high 6.5% during the same period.^[16] India’s current account deficit surged to 4.1% of GDP during Q2 FY11 against 3.2% the previous quarter. The unemployment rate for 2010-11, according to the state Labour Bureau, was 9.8% nationwide.^[4] As of 2011, India's public debt stood at 62.43% of GDP which is highest among the emerging economies.^[7]

India's large service industry accounts for 57.2% of the country's GDP while the industrial and agricultural sectors contribute 28.6% and 14.6% respectively.^[17] Agriculture is the predominant occupation in Rural India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%.^[18] However, statistics from a 2009–10 government survey, which used a smaller sample size than earlier surveys, suggested that the share of agriculture in employment had dropped to 45.5%.^[4]

Major industries include telecommunications, textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and pharmaceuticals.^[19] The labour force totals 500 million workers. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry and fish.^[19] In 2009–2010, India's top five trading partners are United Arab Emirates, China, United States, Saudi Arabia and Germany.

Previously a closed economy, India's trade and business sector has grown fast.^[14] India currently accounts for 1.5% of world trade as of 2007 according to the World Trade Statistics of the WTO in 2006, which valued India's total merchandise trade (counting exports and imports) at $294 billion and India's services trade at $143 billion. Thus, India's global economic engagement in 2006 covering both merchandise and services trade was of the order of $437 billion, up by a record 72% from a level of $253 billion in 2004. India's total trade in goods and services has reached a share of 43% of GDP in 2005–06, up from 16% in 1990–91.^[20] India's total merchandisee trade (counting exports and imports) stands at $ 606.7 billion^[21] and is currently the 9th largest in the world.

Economy of The Republic of India
Mumbai, financial center of India

Rank	9th (nominal) / 3rd (PPP)
Currency	1 Indian Rupee (INR) () = 100 Paise
Fiscal year	1 April – 31 March
Trade organizations	WTO, SAFTA, G-20 and others
Statistics
GDP	$1.843 trillion (nominal: 9th; 2011)[1] $4.469 trillion (PPP: 3rd; 2011)[1]
GDP growth	8.5% (2009-10)
GDP per capita	$1,527 (nominal: 135th; 2011)[1] $3,703 (PPP: 127th; 2011)[1]
GDP by sector	agriculture: 18.1%, industry: 26.3%, services: 55.6% (2011 est.)
Inflation (CPI)	6.95% (February 2012)[2]
Population below poverty line	37% (2010) (Note: 42% live less than $1.25 a day 75.6% live less than $2 a day)[3]
Gini coefficient	36.8 (List of countries)
Labour force	487.6 million (2011 est.)
Labour force by occupation	agriculture: 52%, industry: 14%, services: 34% (2009 est.)
Unemployment	9.8% (2011 est.)[4]
Average gross salary	$1,330 yearly (2010)
Main industries	Telecommunications, Textiles, Chemicals, Food Processing, Steel, Transportation Equipment, Cement,Mining, Petroleum, Machinery, Software, Pharmaceuticals
Ease of Doing Business Rank	132nd[5] (2011)
External
Exports	$298.2 billion (2011 est.)
Export goods	petroleum products, precious stones, machinery, iron and steel, chemicals, vehicles, apparel
Main export partners	US 12.6%, UAE 12.2%, China 8.1%, Hong Kong 4.1% (2010)
Imports	$451 billion (2011 est.)
Import goods	crude oil, precious stones, machinery, fertilizer, iron and steel, chemicals
Main import partners	China 12.4%, UAE 6.5%, Saudi Arabia 5.8%, US 5.7%, Australia 4.5% (2010)
FDI stock	$19.42 billion (2010-11)[6]
Gross external debt	$267.1 billion (31 December 2011 est.)
Public finances
Public debt	62.43% of GDP (2011 est.)[7]
Budget deficit	5.9% of GDP (2011-12)
Revenues	$218.7 billion (2011 est.)
Expenses	$311.2 billion (2011 est.)
Economic aid	$2.107 billion (2008)[8]
Credit rating	BBB- (Domestic) BBB- (Foreign) BBB+ (T&C Assessment) Outlook: Stable (Standard & Poor's)[9]
Foreign reserves	$292.7 billion (Jan 2012)
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars