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Economic development in India

India, located in South Asia, is the second-most populous country in the world, with a population of 1.2 billion. The economy of India is in the top ten in the globe by nominal GDP and the top three for purchasing power parity (PPP).

Since it gained its independence in the 1947, India’s the economic development has followed policies similar to those of a socialist state; most of its contemporary history, which has been characterized by many sectors dominated by the state, extensive regulation and bureaucracy, and a general isolation from the global economy. India’s per capita income increased at an annualized rate of around one percent in the three decades following its independence. Beginning in the mid-1980s, India has been progressively opening its markets via the liberalization of its economy. In 1991 there were more substantial reforms, which have since been renewed. As a result, India has moved toward a more free market “style” of economy during the last decade.

More recently, in the latter part of the 2000s, India’s growth rate hit 7.5%, which in turn has the potential to double average income in the next ten years. Currently the states of India have sizable responsibilities over their economies.

The economic expansion has been fuelled by the increase in services, which have been outpacing other sectors. Some argue India’s development pattern has been fairly unique and that it may be able to proceed in a salutatory manner, i.e. skip the intermediate industrialization phase in process of transforming its economic structure. Despite these promising outlooks, some concerns have been raised about whether this economic growth will be paired with the necessary amount of job creation.

Positive macroeconomic activity has been met what is necessary, but not enough for the significant decrease in poverty among the Indian population. The rate of poverty reduction has not improved in the post-reform period (since 1991). Non-economic measures of development, such as social development, have been less favourable. For instance, child malnutrition has remained persistently high at 46% for 2005-2006.

India’s economic progress and reforms have been followed closely by relevant world entities. The World Bank has opined that the key factors in India’s development will be in rural and agricultural expansion and development, public sector reforms, strengthening of infrastructure, reduction of labour regulations, reformation of weak states, and public health improvements. In March 2011, American Express purchased Loyalty Partner in India for $685M. Credit cards are predicted to drive growth in India where the consumerism of cars, television etc are on a rise, reaching record sales levels. The presence of credit card companies like American Express and their contribution to the economic growth is an interesting aspect to follow up on.

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