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The Economy of India

Indian Economy

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Economy - overview: India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India's output with less than one third of its labor force. Slightly more than half of the work force is in agriculture, leading the United Progressive Alliance (UPA) government to articulate a rural economic development program that includes creating basic infrastructure to improve the lives of the rural poor and boost economic performance. The government has reduced controls on foreign trade and investment. Higher limits on foreign direct investment were permitted in a few key sectors, such as telecommunications. However, tariff spikes in sensitive categories, including agriculture, and incremental progress on economic reforms still hinder foreign access to India's vast and growing market. Privatization of government-owned industries remains stalled and continues to generate political debate; populist pressure from within the UPA government had restrained needed initiatives. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 8.5% GDP growth in 2006, 9.0% in 2007, and 7.3% in 2008, significantly expanding manufactures through late 2008. India also is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers. Strong growth combined with easy consumer credit, a real estate boom, and fast-rising commodity prices fueled inflation concerns from mid-2006 to August 2008. Rising tax revenues from better tax administration and economic expansion helped New Delhi make progress in reducing its fiscal deficit for three straight years before skyrocketing global commodity prices more than doubled the cost of government energy and fertilizer subsidies. The ballooning subsidies, amidst slowing growth, brought the return of a large fiscal deficit in 2008. In the long run, the huge and growing population is the fundamental social, economic, and environmental problem.

GDP:

GDP - real growth rate: 6.6% (2008 est.) 9% (2007 est.) 9.6% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 17.2% industry: 29.1% services: 53.7% (2008 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 3.6% highest 10%: 31.1% (2004)

Distribution of family income - Gini index: 36.8 (2004)

Inflation rate (consumer prices):

Labor force: 523.5 million (2008 est.)

Labor force - by occupation: agriculture: 60% industry: 12% services: 28% (2003)

Unemployment rate: 6.8% (2008 est.)

Budget: revenues: $153.5 billion expenditures: $205.3 billion (2008 est.)

Industries: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software

Industrial production growth rate: 4.8% (2008 est.)

Electricity - production: 665.3 billion kWh (2007 est.)

Electricity - production by source:

Electricity - consumption: 517.2 billion kWh (2006 est.)

Electricity - exports: 378 million kWh (2006 est.)

Electricity - imports: 3.189 billion kWh (2006 est.)

Oil - production: 880,500 bbl/day (2007 est.)

Oil - consumption: 2.722 million bbl/day (2007 est.)

Oil - exports: 450,700 bbl/day (2005 est.)

Oil - imports: 2.159 million bbl/day (2005 est.)

Oil - proved reserves: 5.625 billion bbl (1 January 2008 est.)

Natural gas - production: 31.7 billion cu m (2007 est.)

Natural gas - consumption: 41.7 billion cu m (2007 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 10 billion cu m (2007 est.)

Natural gas - proved reserves: 1.075 trillion cu m (1 January 2008 est.)

Agriculture - products: rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes; onions, dairy products, sheep, goats, poultry; fish

Exports: $175.7 billion f.o.b. (2008 est.)

Exports - commodities: petroleum products, textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures

Exports - partners: US 15%, China 8.7%, UAE 8.7%, UK 4.4% (2007)

Imports: $287.5 billion f.o.b. (2008 est.)

Imports - commodities: crude oil, machinery, gems, fertilizer, chemicals

Imports - partners: China 10.6%, US 7.8%, Germany 4.4%, Singapore 4.4% (2007)

Debt - external: $163.8 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: Indian rupees (INR) per US dollar - 43.319 (2008 est.), 41.487 (2007), 45.3 (2006), 44.101 (2005), 45.317 (2004)

Fiscal year: