Indian Economy
Indian
economy is a developing market economy. It is the world’s fifth-largest economy
as per nominal GDP and the third-largest as per purchasing power parity. However,
according to the International Monitory Fund,
on a per capita income basis, India ranks 139th as per GDP (nominal) and 118th as
per GDP in 2018. Since the start of the 21st century, the annual average GDP
growth was 6% to 7% but from 2014 to 2018, India became the world’s fastest
growing economy, which is surpassing China. Historically, India was the biggest
economy in the world for almost of the two millennia from the 1st till 19th
century.
Some detail about Indian Economy
Agriculture in indian economy
India is an agricultural powerhouse and
popular for many reason. Firstly, it
is the world’s largest producer of pulses, milk and spices. Secondly, it has the world’s largest
cattle herd (buffaloes), as well as the largest area under wheat, rice and
cotton. Thirdly, it is the second
largest producer of rice, wheat, cotton, sugarcane, fishes, sheep & goat
meat, fruit, vegetables and tea. The country has some 195 million hectare under
cultivation of which 37% are irrigated (70m hectare). In addition, forests
cover some 65 million hectare of India’s land.
Moreover, agriculture is the main source of
livelihood for Indian population because It is about 58 percents according to
Gross Value Added (GVA), forestry and fishing around (US$ 276.37 billion). Growth
in GVA in agriculture and allied sectors stood at 4%. Indian food industry has
received a huge growth, increasing its contribution to world food trade. Indian
food and grocery market take place as the world’s sixth largest, with retail
contributing approximately 70 per cent of the total sales. The food processing
industry accounts for 32 per cent of the country’s total food market, but most
Importantly, It is one of the largest industries in India. It is ranked fifth
in terms of consumption, export, production, and expected growth.
Engineering
India’s engineering sector has witnessed a
remarkable growth over the last few years in infrastructure and industrial production.
Engineering sector, being closely associated with the infrastructure and
manufacturing sectors, is of strategic importance to India’s economy. India has
made significant stride towards developing its engineering industry. The
Government has appointed Engineering Export Promotion Council as the apex body
in charge of promotion of engineering products, goods and services. India
exports many things like capital goods, transport equipment, machinery
equipment and fasteners to various countries. India exports engineering goods
mostly to USA and European countries, which account for over 62% of the total
export. Indian engineering export goods for the period of FY20 stood around US$
75.26 billion. On the other hand industrial production for electrical equipment
stood at 104.7 in FY20.
Gems and Jewellery
The gems and jewellery sector plays a
significant role in the Indian economy, contributing around 7% to country’s GDP
and 15 per cent to India’s total merchandise export. It employs over 4.64
million people. India’s gems and jewellery industry is one of the largest in
the world, which is contributing around 29% to the global jewellery
consumption. This industry is the home to more than 300,000 gems and jewellery
businesses. Its market size will grow around US$ 103.06 billion during
2019-2023. India’s demand for gold reached 690.4 tonnes in 2019. India’s gems
and jewellery industry export stood around US$ 29.01 billion in FY20P. At the
same time, India exported around US$ 18.66 billion worth of cut and polished
diamonds to the different countries, which is contributing 64% of the total
gems and jewellery export.
Infrastructure in indian economy
Infrastructure sector is a key sector for Indian
economy because Firstly, this sector is much highly responsible for propelling
India’s development and enjoys intense focus from the Government for making policies
that may ensure the creation of world class infrastructure in the country. Secondly,
infrastructure sector includes dams, roads, power, bridges and urban area development.
Thirdly, India was ranked 44 out of 167 countries in World Bank’s Logistics
Performance Index in 2018 and ranked second in the 2019 Agility Emerging
Markets Logistics Index. According to the Department for Promotion of Industry
and Internal Trade, FDI in Construction Development sector (Infrastructure,
townships and construction projects) stood around US$ 25.66 billion during
April to March 2020. The logistics sector in India is growing at a CAGR of
10.5% annually and is expected to reach US$ 215 billion in 2020.
Textile Industry
This sector is very popular in India
because Firstly, Indian textiles sector contributed around 7% of the industry output
in FY19. It has contributed 2% to the Indian GDP and employed around 45 million
people. Secondly, this sector has contributed 15% to India’s export earnings. Indian
textiles industry has around 4.5 crore employee workers including 35.22 lakh
handloom workers across the country. Thirdly, the domestic textiles and apparel
market stands around US$ 100 billion in FY19. The production of cotton in India
is projected around 36.04 million bales in FY20. In FY19, the production of
fibre in India stood around 1.44 million tonnes and reached 1.60 MT in FY20,
while that for yarn, the production stood at 4,762 million Kg during same
period.
Banking and Finance
Indian banking sector has recently
witnessed the innovative banking models like payments and small financial
banks. RBI’s new measures might go for a long way to restructuring of the India
banking industry. The digital payments system in India has evolved the most
among 25 countries with India’s Immediate Payment Service being the only system
at level five in the Faster Payments Innovation Index. The Indian banking
system consists of around 18 public sector banks, 44 regional rural banks, 40
foreign banks, 21 private sector banks, 1,500 urban cooperative banks and around
94,350 rural cooperative banks in addition to cooperative credit institutions. On
January 31, 2020, the total number of ATMs in India increased to 210,260 and is
further expected to increase to 400,000.
Tourism in indian economy
The Indian tourism industry has emerged as
one of the key factor of growth among the services industries in India. There
are several reason Firstly, tourism in India has potential as considering the
rich cultural, variety in ecology historical heritage, forts, temples and
places of natural beauty spread around the country. Secondly, Indian tourism
has potentially to provide large employment and can be a significant source of
foreign exchange for the country. Thirdly, in 2019, around 4.2 crore jobs were
created in tourism industry in India, which is around 8.1% of the total
employment of India. The numbers are expected to rise around 2% per annum to
55.5 million jobs.
Moreover, according to WTTC, India stays
third among 185 countries regarding travel and tourism sector with total
contribution to GDP in 2018. India was ranked 34th in the Travel and
Tourism Competitiveness Report in 2019. India is the one of the digitally
advanced traveller country for using digital tools for booking, planning and
experiencing the trips. India’s rising disposable income has supported the
growth of outbound tourism. During 2019, foreign tourist arrivals in India
stood around 10.80 million, with a growth rate of 3.15% y-o-y. During 2019,
FEEs from tourism increased 4.8 per cent y-o-y to INR 194,881 crore (US$ 29.96
billion). In 2019, arrivals through e-Tourist Visa increased around 23.6 per
cent y-o-y to 2.9 million.
Education
India plays an important role in the global
education industry. India has one of the largest networks of education
institutions in the world. However, there is still need for further development
in the education system. Moreover, the aim of Indian Government is to raise its
current gross enrolment ratio to 30% by 2020 and will also boost the growth of
education in India. India has the world’s second largest population of about
1.3 billion, which provides a great opportunity for the education sector.
The education sector of India was estimated
around US$ 91.7 billion in FY18 and is expected to reach around US$ 101.1
billion in FY19. Number of colleges and universities in India are around 39,926
and 990 in FY19. India got 37.4 million students enrolled in higher education
in FY19. Gross Enrolment Ratio in higher education reached 26.3% in FY19. India
is the second largest market for E-learning after the USA. This education
sector is expected to reach around US$ 1.96 billion in 2021 with around 9.4
million users.
Health Care
The Indian healthcare system is categorized
into two major components, private and public. The Government, i.e. public
healthcare system, comprises limited secondary and tertiary care institutions
in key cities and focuses on providing basic healthcare facilities in the form
of primary healthcare centres in rural areas. Indian private sector provides
majority of secondary, tertiary, and quaternary care institutions with main concentration
in metros and class I and class II cities. The Indian healthcare market can
increase to Rs 8.6 trillion (US$ 133.44 billion) in 2022. Medical tourism in
India is growing around 18% y-o-y and is expected to reach around US$ 10
billion in 2020. There are still many opportunities for developing the healthcare
services. The Government’s expenditure on healthcare sector has grown to 1.6% of
the GDP in FY20BE from 1.3 % in FY16.
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