Economy India
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 half of India's output with less
than one quarter of its labor force. About three-fifths of the
work-force is in agriculture, leading the UPA government to
articulate an economic reform program that includes developing basic
infrastructure to improve the lives of the rural poor and boost
economic performance. Government controls on foreign trade and
investment have been reduced in some areas, but high tariffs
(averaging 20% on non-agricultural items in 2004) and limits on
foreign direct investment are still in place. The government in 2005
liberalized investment in the civil aviation, telecom, and
construction sectors. Privatization of government-owned industries
essentially came to a halt in 2005, and continues to generate
political debate; continued social, political, and economic
rigidities hold back needed initiatives. The economy has posted an
average growth rate of more than 7% in the decade since 1994,
reducing poverty by about 10 percentage points. India achieved 7.6%
GDP growth in 2005, significantly expanding manufacturing. India 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. Despite strong growth, the World Bank and
others worry about the combined state and federal budget deficit,
running at approximately 9% of GDP; government borrowing has kept
interest rates high. Economic deregulation would help attract
additional foreign capital and lower interest rates. The huge and
growing population is the fundamental social, economic, and
environmental problem.
GDP (purchasing power parity):
$3.666 trillion (2005 est.)
GDP (official exchange rate):
$719.8 billion (2005 est.)
GDP - real growth rate:
8.4% (2005 est.)
GDP - per capita (PPP):
$3,400 (2005 est.)
GDP - composition by sector: agriculture: 18.6% industry: 27.6% services: 53.8% (2005 est.)
Labor force: 496.4 million (2005 est.)
Labor force - by occupation: agriculture: 60% industry: 17% services: 23% (1999)
Unemployment rate:
8.9% (2005 est.)