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India’s National Economic Statistics Report

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Ranked as the world’s fastest growing trillion-dollar economy, India has leaped forward to occupy the number 5 slot in the world’s biggest economies. With a GDP of 2.94 trillion, the country has overtaken the Britain and France in 2019 buoyed by annual average growth of 7% for the last decade. This growth has been made possible due to the country maintaining strength in its traditional industry of agriculture and the manufacturing industry growing in leaps and bounds. The emergence of a very strong service sector has served to increase the country’s economic fortunes with service subsectors such as medical tourism contributing immensely to the country’s economy (Srinivasan, 2016). This essay seeks to discuss the factors of economy that have enabled the country to leapfrog western economic giants and occupy a top five slot of world’s economic giants (Hill, Taylor, & Mathew , 2019).

India’s Past Economic History and Factors That Have Enabled Its Fast-Economic Growth

For a long time, India had depended on agriculture as its main economy earner since independence. However, the country’s manufacturing industry started to grow soon after independence and was able to overtake agriculture as the country’s top economic earner (Schmid, Manwinder, Sandeep , & Shivans, 2016). These two sectors have been joined by Service industry in the last two decades to further boost the country’s economy push it towards the top of the world’s economic giants (Shukla, 2017). Here is a brief description of each of the three top economic sectors in India: –

1.         Agriculture – At 60% of the population, agriculture is the largest employer in India. Although the sector’s contribution to the country’s economy has been declining over the years, its 18% contribution to the economy is still significant. With the second largest arable land area in the world (38% of the country’s toral land ent mass) the country undertakes in organic farming and cereals (rice and wheat) farming (Kaur, Harmandeep , Ohrisaab, & Paminder, 2018).

2.         Manufacturing – Like agriculture, this sector also contributes 18% percent to the country’s economy and provides employment at many levels. It is also the sector with the most evenly distributed wealth among the three which means it contributes most to puling people out of the poverty line (Singh, Verma, Oshima, Dhruvi, & Anu, 2017).

3.         Service sector – As the leading economic earner for India, this sector contributes 54% to the economy. It consists of various subsectors such as hotels and restaurants, transport, storage, communication, financing, insurance, real estate and others and accounts for 31% of total employment (Kaur, Harmandeep , Ohrisaab, & Paminder, 2018). The great leap I the fortunes of the country’s is attributed to the country relaxing its trading rules making it easy to do business and advanced infrastructural facilities.

India’s GDP

With the tag of the world’s fastest growing (trillion dollar) economy, India has a nominal GDP of 3.2 trillion dollars which has been growing at an average of 7% for the last decade. However, its per capita GDP of 2,338 dollars from a gross national income of 10.39 trillion PPP dollars (139th in the world), due to the sheer size of its population (2nd largest in the world after China).

The country’s three main sectors contribute to the GDP as follows; Agriculture 15.4%, Industry 23% and Services 61.5%. Among the components contributing to the GDP (Mehra, Ginder, & Shinsuke, 2017). Domestic consumption accounts for 59% of the total while government consumption takes 11%. Others include fixed capital investments (28%), inventories (3.9%), exports of goods (19%) and imports which stands at negative 22% (Mitra, Singh, & Singh, 2016).

The country exports agricultural products (12%), fuels and mining (13%) and manufactured products (automobiles, agricultural machinery, etc) at 70%. Its major market for goods produced in the country is the domestic market with its outside market including the Arab league (17%), the EU (17%), the USA (15.8%), China, Japan at less than 5% and others (including Africa) accounting for 26%. Its imports include agricultural products, fuel & mining inputs and manufactured goods (Mitra, Singh, Mnapreet, Iqbal, & Harryarsh, 2017). 

With 6.3% of the country’s population living on the poverty line, 60% on less than 3.20 dollars a day and 3% in extreme poverty, the country has some of the world’s largest inequality rates. Only 10% of the country’s population holds 77% of the total wealth of the country. A situation which is not helped by the country’s fractured caste, religious and gender factors (Kaur, Harmandeep , Ohrisaab, & Paminder, 2018).

Macro-Economic Factors for India

Unemployment – The rate of unemployed in India stands at 11%. Majority of the country’s workforce is in the informal sector (93%) which means majority of the employed work either as farm workers or in the urban formal sector (in factories and services industry). Although agriculture contributes only 17% to the country’s economy, it employs more than 60% of the total workforce (Upadhyay & Roy, 2017). This is a clear indication that most of the country’s workforce is consisted of low-paying, inconsistent jobs. Most of these jobs are not covered by the country’s labor laws meaning most of the employees work at the mercy of their employers. The rate of unemployment in India is caused by the structural factors like inadequate capital, utilization of capital intensive technologies, lack of access to land and agricultural household, inadequate infrastructure and a rapid growth in population which results to a large annual increment in labor force on yearly basis (Kaur, Harmandeep , Ohrisaab, & Paminder, 2018). Increased rate of unemployment in India has been associated with depression, low self-esteem anxiety and other related psychological issues, more so if a person wants a job but he or she is not able to secure employment. Tension is probably going to occur and this will cause stress and strain on the body. There are a lot of economic issues especially during the session of unemployment. The level of income is low and this leads to poverty (Schmid, Manwinder, Sandeep , & Shivans, 2016).  

Inflation rate – Inflation stands at 6.69% and at an average of 4.43 for the last five years. This rate is above the India’s central bank’s target of 2-6%.  Prices of consumer items such as foodstuffs (processed and fresh), fuel and light, clothing and footwear, transport and education have increased at a range of between 2.77% to 14.44% (Singh, Verma, Oshima, Dhruvi, & Anu, 2017). This increase has been necessitated by the recent outbreak of Covid-19 which has affected production and provision of goods and services. The uncertainty created by the pandemic has also affected the services industry which is the country’s largest economic contributor hence further increasing the inflation (Mehra, Ginder, & Shinsuke, 2017).   

Balance of trade – With a trade deficit of 6,770,000,000 dollars 9auust 2020), India’s economy has largely been operating at a trade deficit (more imports than exports). The country’s exports reduced to 12.7% due to the Covid-19 effects as imports declining even sharper at 26%. The trade gap has been narrowing in recent years but at a slow pace owing to the fact that the country’s main market for its goods is its domestic population (Kaur, Harmandeep , Ohrisaab, & Paminder, 2018).  

Variation of macro-economic factors 2018-2020

  • Unemployment rate in India averaged 9.21% between 2018-2020. It was at its lowest in November 2018 at 6.7% and highest in April 2020 at 23.5%. during this period, it was mostly holding steady with only slight changes, only to sharply increase at the onset of Covid-19 pandemic (Hill, Taylor, & Mathew , 2019).
  • The inflation rate between 2018-2020 averaged at 6.76% with the lowest inflation been experienced in 2020 at 4.86%. Again, the figure spiked in 2020 due to the Covid-19 crisis (Mehra, Ginder, & Shinsuke, 2017).     
  • The country’s balance of trade has averaged at negative 2,742,000,000dollars but briefly moved to positive figures (790million) in June 2020. The deficit comes because the country’s economy depends most on domestic market (hence less exports) and majority of its GDP comes from services sector (Mehra, Ginder, & Shinsuke, 2017).


India is a fast-growing economy, having leapfrogged economic giants like UK and France to occupy the number 5 of the world’s biggest economies. The fast growth is buoyed by a large domestic market, reliance on a services industry and a large workforce. By contrast, the country has one of the biggest economically unequal populations in the world with majority of its wealth (77%) concentrated to 10% of the population. The country needs to regulate and formalize its workforce as well as create more opportunities for its poorest population in order to bridge the inequality gap.        


Hill, P., Taylor, J., & Mathew , J. (2019). The poor quality of official socio-economic statistics relating to the rural tropical world: with special reference to south India. Modern Asian Studies, 18(3), 491-514.

Kaur, K., Harmandeep , S., Ohrisaab, S., & Paminder, S. (2018). An Empirical Study of Inflation, Unemployment, Exchange Rate and Growth in India. Asian Journal of Multidisciplinary Studies, 2(10), 20.

Mehra, G., Ginder, M., & Shinsuke, N. (2017). Unemployment: Stumbling block to economic growth. IMPACT. International Journal of Research in Humanities, Arts and Literature, 6(1), 71-78.

Mitra, A., Singh, J., & Singh, J. (2016). Structural change in employment and unemployment in India. In Sustainable Development Goals, 16(8), 129-138.

Mitra, A., Singh, J., Mnapreet, S., Iqbal, S., & Harryarsh, S. (2017). Structural change in employment and unemployment in India. In Sustainable Development Goals, 23(5), 129-138.

Schmid, G., Manwinder, K., Sandeep , S., & Shivans, G. (2016). Youth unemployment in India: From a European and transitional labour market point of view. Unemployment, 67(7), 132-156.

Shukla, R. (2017). India science report: Science education, human resources and public attitude towards science and technology. East Asian Bureau of Economic Research, 78(34), 231-354.

Singh, S., Verma, S., Oshima, K., Dhruvi, S., & Anu, S. (2017). The Cause of Unemployment in Current Market Scenario. Vivechan International Journal of Research, 7(3), 177-189.

Srinivasan, N. (2016). India’s statistical system: critiquing the report of the National Statistical Commission. Economic and Political Weekly, 67(5), 303-306.

Upadhyay, P., & Roy, G. (2017). Impact of exchange rate movement and macro-economic factors on exports of software and services from India. Benchmarking: An International Journal, 76(43), 145-167.

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