India Country Gdp

1.0 Introduction

India is a South-East Asian country.  It boosts a total population of over 1.2 billion people and is considered to be the 7th biggest country in terms of area.

The economy of India is considered to be diverse as it embraces many areas, mainly manufacturing, agriculture, textile and mining. This includes agriculture, village farming, a wide range of industries and handicrafts.  Though, slightly less than half of the workforce is in agriculture, services is considered the major source for the country’s economic growth.  Services accounts for nearly 2/3 of India’s output event if the employment for this sector is 1/3 of the labour force (Factbook).

India economy has shifted from what it was in the past.

In the recent years, the English-speaking population largely, has capitalised and enhanced the software industry, the IT services and the business outsourcing services

In 2015, India’s economy was considered to be the 7th largest by GDP in terms of the Purchasing Power (Wikipedia).

As measured by the metrics of ‘Purchasing Power Parity (PPP)’, India’s economy is the third in the world. Till today, more than half the population depends on the agriculture sector both directly and indirectly.  The Indian economy is very social in its approach, but they are presently running with the other capitalist countries.

2.0 Production output performance analysis

2.1 GDP

The Gross Domestic Product (GDP) of a country is based on the measurement of their national income and the output of the country’s economy.  It is the measure of the country’s total expenditure for all services and goods that have been produced in within a certain time frame. The monetary value of a country’s economy is best captured through GDP.  GDP of India was worth 2088.80 billion in 2015 which represents 3.37% of the world economy (Trading Economics).

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2.2 GDP Growth Rate

The GDP growth rate in India expanded in March 2017, following a growth from the previous quarter.  A quarterly update is done to obtain the data for the Real GDP growth for India.  

As per the chart, the data reached 13.3% in Mar 2020 which was an all-time high and in Mar 2009, it recorded an all-time low of 0.2%.  

2.3 GDP Per Capita

In terms of GDP per capita analysis, I would like to do a comparison of India with Pakistan.

India’s GDP is recorded as 8.19 which is more than Pakistan by 8.36 at the PPP and nominal terms.  In 2007, India crossed the mark of $1 trillion and 7 years later, it crossed the mark of $2 trillion.  Whereas, Pakistan has yet to cross the mark of $1 trillion.  Back in 1980, the size of Pakistan’s economy was $31 whilst, India’s was at  $181 (Statistics Times).

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In terms of GDP per capita, both India and Pakistan has been neck to neck.  In the year 2006, the per capita income of Pakistan was more than India in terms of PPP.  However, in 2014, India’s per capita increased to be more than Pakistan in terms of nominal and PPP.

Whilst the growth rate of Pakistan was estimated to be at 4.14% in 2014, India was almost twice of that at 7.17%.  During the period 1980 to 2014, the average GDP growth for Pakistan was at5.02% whilst India’s was slightly higher at 6.23%.

2.4 Government Measure - GDP

The government of India introduced some measures to achieve better economic performance.  In Nov 2016, they announced the ending of high denominator bank notes of Rs 500 and Rs 1000. This initiative was introduced to stop the market of ‘black money’ which is the biggest problem in the production of falsified Indian Rupees currency. This creates the avenue for improvement in the economy’s growth.

With this, many foreign companies are beginning to start up their companies in India, relying on initiatives introduced by the government, such as “Make In India” and “Digital India”.  Mr Narendra Modi, the PM of India launched the initiative with the intention of increasing the manufacturing sector of India’s economy, which will result in an increase the PPP of every customer. This would also increase the demand and will pave the way for development which is beneficial to the country’s investors (Indian Express).

Mr Modi has also introduced another initiative known as ‘Digital India’. This is an effort in trying to increase the manufacturing sector’s contribution towards the economy’s GDP from the current 17% to a targeted 25%. ‘Digital India’ will focus on 3 core components, namely, increase of literacy in the digital sphere, create digital infrastructure and the delivering of services digitally.

3.0 Labour market analysis

3.1 Types of Unemployment

To analyse the Indian Labour market, it is predominantly characterised by information employment.  This is due to 90% of India working as casual workers or self  employees.  This trend is also gaining traction in the organised sector, which is a trifle worrying.

3.2 Unemployment Trend

The good side is that India’s unemployment rate has declined significantly. It dropped from a 9.5% in Aug 2016 to a half at 4.8% in Feb 2017.  This is due to the increase in the focus on rural jobs by the Government. There is a scheme in place for this known as the Mahatma Gandhi Rural Employment Guarantee Act (MGNREGA).

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Today, more than 90% of the workforce in India is made up of the unorganised or the informal sector.   Almost 50% of the national income evolves from this sector.    Ever since 1990s, in-formalisation of jobs is a concern for India (OECD Data).

India is known to be an informal economy due to its growing competition and increased market opportunities but limited resources. The dominant nature of the information sector has brought about a scenario where the goodness of the growth of the economy is being centralised only among a few elite. The larger part of the population that is growing in India is still living poorly.

3.3 Government Measures - Unemployment

The government has put in measures to achieve full employment. They changed their strategic policies to be more complete and comprehensive and have sustained the economy’s growth in the last decade.  However, the important issues attributing to the every growing in-formalisation is not yet addressed nor targeted.