Economic Outlook of India
Economics is a constituent that has shaped the face of the world
since the beginning of the civilization. From the early initiation
of society, the concept of personal property has come a long way to
be developed into a complex structure of modern economic system. The
economic condition has not only been considered for long as the sole
unit of development, but it is still dictating the power relation
and its hierarchy in the whole world.
India the sub-continent with 3,287,590 square kilometre area and
1,132,446,000 population (1.1+ billion as estimated in 2008) is a
country dependent largely on agriculture for its income. The country
has occupied the second position in the world in the estimation of
total agricultural products per year. Along with agriculture the
other main sectors developed after India’s independence in 1947 are
industrial sectors, banking and finance as well as service sectors.
However, after the adoption of the free market policy and economic
liberalization around 1991, the country has augmented various other
sectors like Information Technology, Business Process Outsourcing,
Manufacturing, Telecommunication and Medical Tourism.
Previously, India followed rather a rigid outlook for its economic
policy. It was largely inclined towards the protectionist Fabian
socialistic policies. The economic activities in the country were
streamed towards building substitution for import, which was a
stress on industrialization. States used to freely interfere in
several sectors like labour or the functions of a financial
industry. Centralisation of economic policy had given birth to a
rigid economic outlook. This rigidity reflected in policies for
foreign trade or foreign investment along with the privatisation or
the involvement of private sectors in with governmental activities.
India’s first Prime Minister Jawaharlal Nehru along with Prasanta
Chandra Mahalanobish, the famous statistician attempted to implement
some measures of relaxation in privatisation of government’s role in
streaming the economic activities. The first implementation of
relaxation occurred around 1980 when the capacity expansion received
revitalization. This resulted into effective measures in controlling
price, depreciation of corporate duty and incumbent extension.
In 1991 the revolutionary change of economic policy has brought new
outlook with foreign direct investment ending the era of public
sectors’ monopoly and license requirements for import,
industrialization and investment. This has given birth to a mixed
economy of capitalist and socialist features. The GDP multiplied
with augmentation of development measures like food, shelter,
security, literacy and life expectancy. The real gross domestic
products increased from 200,000 crore rupees of 1950-51 to near
about 1,400,000 crore rupees of 2001-02. Agricultural growth was
from 2.5% in 1950s to 4.5% in 2002, while industrial sector
increased from 3.9% to 6.4% and service sectors from 2.7% to 7.8%.
This estimated the total growth rate from 3.5% to 5.9%.
The major exports materials are engineering goods with 23% export
market share, petroleum products with 14.7%, textile products with
13.5% and gems and jewelleries with 12.3%, as estimated in 2006-7.
In the same estimation the major imports products are of petroleum
with 29.9%, electronic goods with 8.4%, gold and silver with 7.7%
and machinery with 7.3%. The major suppliers are China, which covers
a market share of 8.4%, as US takes the second position with 5.8%,
Germany the third with 4.4% and Singapore the fourth with 4.4%.
India’s main markets are US (16.5%), UAE (8.1%), China (7.5%) and UK
The current GDP as estimated in 2008 is 5.21 trillion dollars with
9.6% growth rate and 1,089 dollar of nominal per capita income. The
main sectors are food processing, transportation equipment,
textiles, steel, chemicals, cement, petroleum, software, mining,
machinery and business services. It is predicted that with such a
growth rate soon India will emerge as one of the major economic
powers of the world. By 2020 India’s GDP will cross that of Italy
and France, by 2025 of Germany, Russia and UK and by 2035 of Japan.
The statistical evaluation shows that in the year 2035, India will
emerge as the third biggest economical power of the world, falling
just behind United States and China.
However, along with this high development India still suffers from
primary developmental problems. The distribution of capital is
highly partial. The benefits of free market and foreign investment
do not reach a large population. People are still behind poverty
line with poor literacy rate. A slow market and slower growth rate
are predicted to influence the Indian economical outlook in near
future. The delay on accepting policies like labour market reforms
and special economic zone harm the total economic advancement.
The country suffers hugely from lack of initiative in the fields of
indigenous industries and small-scale businesses. A highly liberal
outlook threatens to reshape the country as the market place for the
developed nations. By 2025 India would reach a stage where there
will be 580 million consumers belonging to the middle-class. The
economic disparity will increase with lack of equal distribution and
high rate of corruption. At this stage only a sound and wise
economic outlook can help the country to complete its journey
successfully towards an absolute and sustainable development.