INDIA - ECONOMY

 

India has, in recent years, been one of the world’s best performers in terms of its economy. This has been partly due to increased foreign exchange reserves and capital market, a boom in the real estate industry and market reforms. 2009 took a toll on its market, as it did with the rest of the world’s economies. However, India’s victory lies not only in the numbers it generates, but in the fact that, as a country that has sky-high unemployment and poverty rates, its competition is far more challenging than that of more developed countries.

During the 20th Century, between 1950 and 1980, there was an astounding level of corruption within government and those that controlled the country’s finances. This was as a result of the socialist type of regime in place, which saw a high level of protectionism and public ownership. This situation changed in 1991, when India had to face the growing payment of balance crisis. It changed its approach to one of being market-based. This has led to increased foreign trade and investment being major facets of India’s economy.

Today, India’s economy grows at an impressive rate every year. The service industry makes up for more than half of the
Image of a set of Indian Rupee currency
Set of Indian Rupee currency
annual Gross Domestic Product (GDP), while the agricultural sector contributes 28%. Its industries are mainly supported by textiles, gems, leather, steel, chemicals, cement, petroleum, software and transport equipment. Some of its most important farming products include rice, sugarcane, cotton, tea, potatoes, cattle, sheep, goats, poultry and fish.

Despite these booming sectors, India continues to have the world’s highest proportion of poverty-stricken people and malnutrition. Over a third of the population lives below the international poverty line and almost half of Indian toddlers under the age of three years suffer from malnutrition. At least half of the children are below a healthy weight. Part of the reason for this is that the wealth is not evenly distributed. Some areas and populations are doing extremely well, while others remain poor and hungry. This distribution of wealth is as a result of geographical location, social norms, education levels, and so on. HIV and AIDS also remain major problems in India, as many of the young, able workmen and –women are dying or ill, unable to work. This means that the industry sector has to be supported by a smaller workforce. It also means that the workforce is made up of the older generation, as HIV and AIDS is most commonly contracted by those between 16 and 25 years of age. Another problem causing the unbalanced distribution of money is the lack of rural development taking place. This leaves rural folk in much the same position that they have been in for the past few decades, while urbanites are able to gain an education and develop accordingly.

Regardless of these challenges, some global economists have predicted that India will continue to flourish and has the chance of exceeding major global players, such as the United States of America, within the next few decades. While this remains to be seen, it certainly paints an optimistic picture for this hard-working and determined country.


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