India: Economy#
India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly less than half of the work force is in agriculture, but services are the major source of economic growth, accounting for nearly two-thirds of India's output but employing less than one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services, business outsourcing services, and software workers.India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization measures, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and served to accelerate the country's growth, which averaged under 7% per year from 1997 to 2011. India's economic growth began slowing in 2011 because of a decline in investment caused by high interest rates, rising inflation, and investor pessimism about the government's commitment to further economic reforms and about slow world growth. Rising macroeconomic imbalances in India and improving economic conditions in Western countries led investors to shift capital away from India, prompting a sharp depreciation of the rupee.
Growth rebounded in 2014 and 2015, with both years exceeding 7%. Investors’ perceptions of India improved in early 2014, due to a reduction of the current account deficit and expectations of post-election economic reform, resulting in a surge of inbound capital flows and stabilization of the rupee. Since the election, economic reforms have focused on administrative and governance changes largely because the ruling party remains a minority in India’s upper house of Parliament, which must approve most bills. Despite a high growth rate compared to the rest of the world, in 2015, India’s government-owned banks faced mounting bad debt, resulting in low credit growth and restrained economic growth.
The outlook for India's long-term growth is moderately positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. However, India's discrimination against women and girls, an inefficient power generation and distribution system, ineffective enforcement of intellectual property rights, decades-long civil litigation dockets, inadequate transport and agricultural infrastructure, limited non-agricultural employment opportunities, high spending and poorly targeted subsidies, inadequate availability of quality basic and higher education, and accommodating rural-to-urban migration are significant long-term challenges.
Economic Facts#
| GDP (purchasing power parity) | $8.721 trillion (2016 est.) $8.103 trillion (2015 est.) $7.534 trillion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $2.251 trillion (2015 est.) |
| GDP - real growth rate | 7.6% (2016 est.) 7.6% (2015 est.) 7.2% (2014 est.) |
| GDP - per capita (PPP) | $6,700 (2016 est.) $6,300 (2015 est.) $5,900 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 30.2% of GDP (2016 est.) 31.3% of GDP (2015 est.) 32.8% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 60.8% government consumption: 11.4% investment in fixed capital: 27.6% investment in inventories: 3% exports of goods and services: 19% imports of goods and services: -21.8% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 16.5% industry: 29.8% services: 45.4% (2016 est.) |
| Agriculture - products | rice, wheat, oilseed, cotton, jute, tea, sugarcane, lentils, onions, potatoes; dairy products, sheep, goats, poultry; fish |
| Industries | textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software, pharmaceuticals |
| Industrial production growth rate | 7.4% (2016 est.) |
| Labor force | 513.7 million (2016 est.) |
| Labor force - by occupation | agriculture: 49% industry: 20% services: 31% (2012 est.) |
| Unemployment rate | 8.4% (2016 est.) 8.4% (2015 est.) |
| Population below poverty line | 29.8% (2010 est.) |
| Household income or consumption by percentage share | lowest 10%: 3.6% highest 10%: 31.1% (2005) |
| Distribution of family income - Gini index | 33.6 (2012) 37.8 (1997) |
| Budget | revenues: $200.1 billion expenditures: $283.1 billion (2016 est.) |
| Taxes and other revenues | 8.9% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -3.7% of GDP (2016 est.) |
| Public debt | 52.3% of GDP (2016 est.) 52.4% of GDP (2015 est.) note: data cover central government debt, and exclude debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data exclude debt issued by subnational entities, as well as in |
| Fiscal year | 1 April - 31 March |
| Inflation rate (consumer prices) | 5.6% (2016 est.) 4.9% (2015 est.) |
| Central bank discount rate | 7.75% (31 December 2014) 7.75% (31 December 2013) note: this is the Indian central bank's policy rate - the repurchase rate |
| Commercial bank prime lending rate | 9.3% (31 December 2016 est.) 10.01% (31 December 2015 est.) |
| Stock of narrow money | $385.9 billion (31 December 2016 est.) $370.5 billion (31 December 2015 est.) |
| Stock of broad money | $1.728 trillion (31 December 2016 est.) $1.704 trillion (31 December 2015 est.) |
| Stock of domestic credit | $1.579 trillion (31 December 2016 est.) $1.57 trillion (31 December 2015 est.) |
| Market value of publicly traded shares | $1.516 trillion (31 December 2015 est.) $1.558 trillion (31 December 2014 est.) $1.139 trillion (31 December 2013 est.) |
| Current account balance | -$31.97 billion (2016 est.) -$22.09 billion (2015 est.) |
| Exports | $271.6 billion (2016 est.) $272.4 billion (2015 est.) |
| Exports - commodities | petroleum products, precious stones, vehicles, machinery, iron and steel, chemicals, pharmaceutical products, cereals, apparel |
| Exports - partners | US 15.2%, UAE 11.4%, Hong Kong 4.6% (2015) |
| Imports | $402.4 billion (2016 est.) $409.2 billion (2015 est.) |
| Imports - commodities | crude oil, precious stones, machinery, chemicals, fertilizer, plastics, iron and steel |
| Imports - partners | China 15.5%, UAE 5.5%, Saudi Arabia 5.4%, Switzerland 5.3%, US 5.2% (2015) |
| Reserves of foreign exchange and gold | $359.1 billion (31 December 2016 est.) $351.6 billion (31 December 2015 est.) |
| Debt - external | $507 billion (31 December 2016 est.) $480.8 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $351.8 billion (31 December 2016 est.) $296.8 billion (31 December 2015 est.) |
| Stock of direct foreign investment - abroad | $149 billion (31 December 2016 est.) $139 billion (31 December 2015 est.) |
| Exchange rates | Indian rupees (INR) per US dollar - 68.3 (2016 est.) 64.152 (2015 est.) 64.152 (2014 est.) 61.03 (2013 est.) 53.44 (2012 est.) |