Indian Economy Overview

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12 Questions

What are the five key areas where the Indian government is involved?

Defence, railways, atomic energy, coal and electricity generation, and major ports

What was India's GDP in 2015?

$3.4 trillion

Which sector employs the vast majority of the workforce in India?

Agriculture

What was the average annual growth rate of India between 2011 and 2015?

7.3%

Which sector contributed approximately 17% to the Gross Value Added (GVA) in the financial year 2019-2020?

Manufacturing

In 2019, did India have a positive or negative balance of trade?

Positive balance of trade

What percentage of the Indian labor force is engaged in nonagricultural activities?

Less than 50%

Which sector accounted for the highest percentage of global trade in goods and services from India in 2020?

Manufacturing

What is one of the challenges facing the Indian economy as mentioned in the text?

High inflation

What percentage of the Indian labor force is engaged in agriculture?

Over 70%

What has been a persistent challenge in India's economy despite positive indicators?

High inflation

What was the approximate value of India's foreign exchange reserves as of December 2020?

$679.21 billion

Study Notes

Indian Economy

The Indian economy is one of the fastest growing economies in the world. It operates under the framework of a socialist, secular democratic republic, which controls the commanding heights of the economy. The government is involved in five key areas: defence, railways, atomic energy, coal and electricity generation, and major ports. India has a mixed economic system with both private enterprise coexisting alongside public sector enterprises. Here's more information about various aspects of the Indian economy:

Economic Growth Rate

India's average annual growth rate was around 7% between 2002 and 2011. From 2011 to 2015, the economy grew at an average rate of 7.3%. The country's GDP was $3.4 trillion in 2015. As of 2015, India was the world's seventh-largest economy by purchasing power parity (PPP) and the second-fastest growing major economy.

Key Sectors

The key sectors in India's economy are agriculture, manufacturing, and services. Agriculture contributed around 17% to the Indian economy's GDP in 2018. Manufacturing contributed approximately 17% to the Gross Value Added (GVA) in the financial year 2019-2020. In terms of employment, agriculture employs the vast majority of the workforce. Despite its importance, agriculture accounts for only 17% of the country's total exports. Services contribute substantially to the overall GDP of India.

Foreign Trade

In 2019, India had a positive balance of trade at $13.4 billion. As of December 2020, India's foreign exchange reserves stood at $679.21 billion. There have been issues with India's negative trade balance since 2008. However, there were signs of recovery after the global financial crisis. The services sector accounted for 40.2% of the global trade in goods and services from India in 2020, while manufacturing accounted for 49.2%, and agriculture accounted for just 10.6%.

Employment

As of 2019, India had an estimated population of 1.4 billion people. Of these, less than half the population earn their livelihood from nonagricultural activities. Approximately 70% of the nonagricultural labor force could be classified as wage/salaried employees. Agriculture remains the largest single employer accounting for over two thirds of the labour force.

Challenges in the Indian Economy

Despite positive economic indicators, challenges persist in the Indian economy. One such challenge is high inflation, which can lead to higher costs for consumers and businesses. Another challenge is massive unemployment and rising inequality, especially among youth. A significant part of the agricultural population continues to suffer from poverty. Finally, the lack of access to credit facilities by small borrowers poses a concern.

Explore key aspects of the Indian economy, including economic growth rate, key sectors, foreign trade, employment, and challenges. Learn about India's GDP, sectors contributing to the economy, foreign exchange reserves, labor force composition, and existing economic challenges.

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