Economic development in India

The economic development in India followed socialist-inspired policies for much of its history after independence. During this time, the government owned many industries, and the country's income grew very slowly. However, starting in the mid-1980s, India began to change its economic policies, allowing more private business and foreign investment. These changes sped up growth, and today India is one of the world's largest economies.

India's economy has grown quickly in recent years, with some states growing faster than others. The country ranks highly in overall size but still faces challenges, such as not enough jobs and health issues like child malnutrition. Despite these problems, India's economy continues to grow, driven mainly by services like technology and finance.

From around US$480 billion at the start of the 2000s, India's economy grew five times to reach US$2.2 trillion by 2015. In 2015, India had the fastest growth among major economies, with its services, manufacturing, and agriculture sectors all contributing to this success.

History

Before India's Independence, from 1900 to 1947, the money that each person could earn stayed the same or even went down. After India became independent, Jawaharlal Nehru tried new ways to help the country grow, even if it meant changing some ideas about how the economy should work.

Later, in 1957, India started focusing on making things like steel, coal, and oil to help the country grow. Some people thought this was a good idea, but others believed it caused problems, like higher food prices and less focus on farming. Even with these debates, India made progress, and the amount of money each person could earn grew a little bit each year during this time.

Agriculture

Main article: Agriculture in India

India is one of the top countries in farming. Farming and related work like looking after forests, cutting trees, and fishing made up about 18.6% of India’s total money made in 2005. Even though this part of the economy is getting smaller, it is still the biggest and helps many people.

Since 1950, farmers have been growing more food on the same amount of land. This is because of special plans made by the government, better ways to water crops, new technology, and help given to farmers. India makes the most milk, cashew nuts, coconuts, tea, ginger, turmeric, and black pepper in the world. It also has the most cows and bulls, with 193 million of them. India grows a lot of wheat, rice, sugar, groundnuts, and fish, and it is third in making tobacco. India grows 10% of all the fruits in the world, and it is the best at growing bananas and a fruit called sapota, also known as chiku.

The government is trying to help farmers by building places to store their crops and making it easier to sell them. Some big problems in farming include too much help from the government, which makes things more expensive, and not enough places to store and sell crops.

Research and development

The Indian Agricultural Research Institute, started in 1905, helped India grow more food in the 1970s. The Indian Council of Agricultural Research is in charge of studying and teaching about farming. There are also special institutes that help farmers use science to grow better crops. One famous scientist, M. S. Swaminathan, helped start these changes and works to make sure farming is good for the environment and that everyone has enough food.

Industrial output

India ranks fifth in the world for factory output. Major manufacturing areas are in the states of Maharashtra, Gujarat, Karnataka, Tamil Nadu, Telangana, and Andhra Pradesh because of better infrastructure and skilled workers. Manufacturing, along with mining, quarrying, and energy production, makes up 27.6% of India’s total economy and provides jobs for 17% of all workers.

After economic changes in 1991, India faced more competition from other countries. This led to private industries becoming more private, opening up new areas for business, and increasing the production of everyday items like phones and cars. Today, India is the second largest maker of mobile phones and the fourth largest maker of cars in the world. The government’s “Make In India” campaign aims to help local businesses grow and promote products made in India.

Services

India ranks fifteenth in the world for services output. The service industry employs many workers who speak English, especially on the supply side. Demand has grown from foreign consumers interested in India's services or those looking to move some of their work to India.

India's technology industry has grown a lot, even though it makes up only a small part of the country's total economy. Before the year 2000, many investments were made in undersea fiber-optic cables connecting Asia to the rest of the world. After the economic boom ended, these cables were sold for much cheaper. This led to widely available, low-cost communication systems. Along with many talented people, these changes helped India become a major center for business processes that other companies move to India. The IT and IT services sector has created many jobs, especially for young college graduates. As of March 2006, about 1.3 million people worked in these sectors, and they helped create many more jobs in other ways.

GDP growth rate

Since the economic changes in 1991, India's economy has been growing faster. The following table shows data from the World Bank:

The growth rate varies across different parts of India. In 2015–16, areas like Andhra Pradesh, Bihar, and Madhya Pradesh had higher growth rates than places such as Maharashtra, Odisha, and Punjab.

Companies

In 2015, 47 companies from India were included in a big list called the Forbes Global 2000. Here are the top 10 companies from India:

India's resource consumption

Further information: resource consumption

Oil

India uses a lot of oil, second only to China in the Asia-Pacific region. Because India produces less oil than it uses, the country needs to import oil from other places to meet its needs.

Natural gas

India has a lot of natural gas underground. In 2004, it had about 38 trillion cubic feet of natural gas that could be used.

In 2004, India used about 1,089 billion cubic feet of natural gas. That year, India started buying natural gas from other countries. It bought 93 billion cubic feet of a special type of natural gas called liquefied natural gas from Qatar.

Most of the natural gas in India is found and used by state-owned companies like ONGC and Oil India Ltd. Some foreign companies also help find and use natural gas. A private Indian company, Reliance Industries, found a lot of natural gas in 2002 in the Krishna Godavari basin, so it will play a bigger role in the future.

The Gas Authority of India Ltd., or GAIL, mostly controls how natural gas is moved and shared in India. In 2006, new rules allowed foreign and private companies to invest fully in pipeline projects. Even with these changes, GAIL will likely stay the main company in this area because it already has much of the needed infrastructure.

Issues

See also: Economy of India

Regulation and public sector

India was ranked 63rd on the Ease of Doing Business Index in 2020. Many forms of unfair practices have affected India for a long time. The rules and paperwork that made it hard for businesses to grow were reduced after changes in 1991, but unfair practices are still common. These practices cost money, make it hard for businesses to grow, and raise the price of services that people need. Efforts like laws that let people ask for information and watch groups have helped reduce these problems, but more work is needed.

Employment

India's workforce grows faster than the number of jobs available. Many people work only when they can find a job and have no steady income. Most workers are not part of big, organized businesses. Many young people under 14 years old work, mostly on farms with their families. The government and many groups are working to stop children from working in dangerous jobs and to give all children a chance to go to school.

Environmental degradation

Main article: Environmental issues in India

Many people in India and other developing countries do not have clean water because waste is often dumped into rivers without being cleaned. This can make people very sick. Only a few cities in India treat their wastewater properly. Many people cook with wood or coal, which creates smoke that can harm their health. These problems also affect plants, animals, and can lead to diseases.

Effect on women

Economic growth in India has affected women in different ways. Traditionally, women in India have taken care of their homes and families, and this work is not usually counted as part of the economy. Because of this, India has fewer women working than many other countries. Women who do have jobs often earn less than men.

Since the 1990s, India has grown economically, but this has not always meant more jobs for women. Some women, especially those with less education and living in rural areas, have found more work in informal jobs, like small businesses or helping others. Women with more education, especially in cities, have seen more opportunities, especially in jobs like call centers. Organizations have been created to help women get an education and find jobs, supporting their efforts to be part of the workforce.