Economy - overview
India's diverse economy encompasses traditional village farming,
modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Services are the major source of economic
growth, accounting for more than half of India's output with less
than one third of its labor force. About three-fifths of the work
force is in agriculture, leading the UPA government to articulate
an economic reform program that includes developing basic infrastructure
to improve the lives of the rural poor and boost economic performance.
The government has reduced controls on foreign trade and investment.
Tariffs averaged 12.5% on non-agricultural items in 2006. Higher
limits on foreign direct investment were permitted in a few key
sectors, such as telecommunications. However, tariff spikes in sensitive
categories, including agriculture, and incremental progress on economic
reforms still hinder foreign access to India's vast and growing
market. Privatization of government-owned industries remained stalled
in 2006, and continues to generate political debate; populist pressure
from within the UPA government and from its Left Front allies continues
to restrain needed initiatives. The economy has posted an average
growth rate of more than 7% in the decade since 1996, reducing poverty
by about 10 percentage points. India achieved 8.5% GDP growth in
2006, significantly expanding manufacturing. India is capitalizing
on its large numbers of well-educated people skilled in the English
language to become a major exporter of software services and software
workers. Economic expansion has helped New Delhi continue to make
progress in reducing its federal fiscal deficit. However, strong
growth - more than 8 percent growth in each of the last three years
- combined with easy consumer credit and a real estate boom is fueling
inflation concerns. The huge and growing population is the fundamental
social, economic, and environmental problem.
GDP (purchasing power parity)
$4.156 trillion (2006 est.)
GDP (official exchange rate)
$804 billion (2006 est.)
GDP - real growth rate
9.2% (2006 est.)
GDP - per capita (PPP)
$3,800 (2006 est.)
GDP - composition by sector
agriculture: 19.9%
industry: 19.3%
services: 60.7% (2005 est.)
Population below poverty line
25% (2002 est.)
Household income or consumption by percentage share
lowest 10%: 3.5%
highest 10%: 33.5% (1997)
Inflation rate (consumer prices)
5.3% (2006 est.)
Investment (gross fixed)
29.2% of GDP (2006 est.)
Labor force
509.3 million (2006 est.)
Labor force - by occupation
agriculture: 60%
industry: 12%
services: 28% (2003)
Unemployment rate
7.8% (2006 est.)
Distribution of family income - Gini index
32.5 (2000)
Budget
revenues: $109.4 billion
expenditures: $143.8 billion; including capital expenditures of
$15 billion (2006 est.)
Public debt
52.8% of GDP (federal and state debt combined) (2006 est.)
