Behind China, India is the second fastest growing economy. According to a survey by Goldman Sachs, India will become the 3rd largest economy by 2035. This is measured in $US. If we use PPP (purchasing power parity) which takes into account local purchasing power, India already has the 3rd largest economy.
However, despite having a GDP of US $1.09 trillion (2007). This works out as an average GDP per capita of $964 ($4,182 at PPP – cost of living is relatively cheaper in India)
Growth in 2007 is forecast to be 9.2%. Growth will slow slightly next year. The RBI estimates the economy to grow at 8.5% in the financial year ending March 2008.
Furthermore, despite the rapid growth, poverty remains a real problem, especially in rural India. In 2008 and beyond India faces the real challenge of making sure that all sections of the population continue to benefit. Current estimates suggest that 27% of the Indian population live below the poverty line. According to this article, 77% of Indians live on less than half a dollar a day. Most of these low wages are in the informal sector, working in agriculture on doing odd jobs.
Strengths of Indian Economy
- FDI. India is one of the world’s largest recipients of FDI. India has become the favoured location of outsourcing labour intensive work such as call centres.
- India benefits from a well educated middle class, fluent in English.
- The economy is reaping some of the benefits of greater market liberalisation and privatisation
- Rich in Natural resources such as gold, Coal, iron, diamonds. (however a net importer of oil. only produces 25% of its energy demands.
- See article: Strengths of Indian Economy
Indian Rupee
The Indian rupee is worth about 42 to $1. and 55 to 1Euro
With stronger growth and rising interest rates, the Rupee could continue to appreciate against other currencies in the coming year. The challenge will be whether India can maintain growth without becoming inflationary and unsustainable.
Indian Stock Market
If the rate of Indian economic growth is maintained, the Indian stock Market offers great potential. Investment bank, Morgan Stanley believes the SENSEX will touch 50,000 by 2020. (The SENSEX is currently around 13,000)
More Essays on the Indian Economy
- problems facing Indian economy
- Indian Economy – at Bullish Indian
there seems to be some error in the date this article was posted and the values mentioned in the article: eg -the article was posted on Dec 1, 2007 but the sensex value quoted here is 15,000. Sensex has crossed 19000 and hovering cloe to 20K! either you are not up-to-date with the information or you got all the dates wrong
That 77% live on less 0.5 dollar a day is incorrect.
this is proud for indians
the post is very well written. but now at present with changing scenario of ruppee depreciating, stock market crashing, what is future of india…..is this atemporary phase or will last for long
Indian Economy cannot be judged if u had discussed about the fluctuvations on count draw a graph for yourself for the last five years financial growth.
i red the indian economy 2008 and i knew that the information abt our economy in 2020 is totally wrong.
Ther are so many things needs to be done for a better economy:
1. Improving political standards.
2. The banks have some standard rate of interest and rules.
3. human resources should be use properly.
Is India still an underdeveloped economy?
Still we are developing country and sensex is down under 1000 points.
So this assumption of GDP seems very hypothetical now.
We are also getting badly affected.
Still we are developing country and sensex is down under 10000 points.
So this assumption of GDP seems very hypothetical now.
We are also getting badly affected.
update the latest information
I am proud to be indian & greatest Economical conditional
in india & greatest porsanalities Dr. Manmohansigh
According to the world bank 45%(approximately) are below poverty line(number of people who earn less than 1.25$ a day) and according to asian development bank Indians living below poverty line are 55% (people earning less than 1.35$ per day), but according to Indian Govt this number is around 25% as our Govt calculates this issue according to number of calories consumed per day. so according to our govt people who drink fruit juice(for dieting) are poorer than those who eat one meal per day.
Hi i’m frm malaysia.i’m proud of india and indians.very talented peoples.good luck india.best wishes dr manmohan
i m pround to be an indian……………. jai hind
i proud to be a part of indianeconomy.