India’s Economy: The Latest News and Trends
India is home to the second-biggest population in the world and the world’s sixth-biggest economy. It’s a nation of 1.2 billion people and has plenty of room to grow. With a rapidly developing infrastructure and a growing middle class, India’s economy is a power player in the international market. Here’s the latest news and trends in Indian economy.
GDP Growth
In the 2018–2019 fiscal year, India’s economy grew 6.8%, making it one of the fastest growing economies in the world. This was driven primarily by consumer spending, government reforms, and a strong base in agricultural production. India’s growth rate is projected to reach 7% in 2019–2020, with the International Monetary Fund expecting an even brighter future of 7.3% for 2020–2021.
Top Exports
India’s leading exports include petroleum products, gems and jewelry, and pharmaceuticals. The country also exports large amounts of apparel, auto components, machinery and equipment, and electronics. India’s largest trading partner is the United States, followed by China and the United Arab Emirates.
Foreign Investment
India has faced challenges from foreign investment in the past, but the country is becoming increasingly welcoming of foreign investors. This has created more jobs and boosted the economy, as well as improving India’s infrastructure. Recently, the government announced a 25% corporate tax rate for businesses that make under 12 million rupees in revenue annually to promote more foreign investment.
Ease of Doing Business
India experienced a jump of 23 spots in the World Bank’s 2018 “Doing Business” report, placing it at 77th out of the 190 countries monitored. This marked the biggest improvement of any nation in the survey and is due to relaxed regulations in areas like dealing with construction permits, obtaining business licenses, and opening a new business.
Startup Companies
In the past decade, India’s tech startup scene has been booming. Companies like Flipkart, an Amazon-like e-commerce platform, have created thousands of new jobs and revenue streams. Indian tech companies are now valued at $128 billion, with many receiving astronomical amounts of venture capital investments.
Unemployment
India’s unemployment rate rose to 6.1% in 2017-2018, according to the International Labour Organization. This is a 0.6% increase from the 2015-16 rate of 5.5%. While the unemployment rate is still on the rise, it has dropped from 6.2% in 2018-2019. As of 2018, India was the only major economy to expand jobs faster than population growth.
Education
India has a long way to go in terms of education. The country’s literacy rate is only 73.4%. Public spending on education is also relatively low; the country spends just 3.3% of its GDP on education. To help bridge the gap in education, the government is aiming to increase the number of higher education institutions, particularly in rural areas.
Integration of Digital Technology
The integration of digital technology with traditional industries is also occurring, allowing India’s economy to become more efficient. Digital technology has been embraced by many fields, such as agriculture, finance, and health. India is becoming more connected than ever before and this is helping to stimulate economic growth.
Infrastructure
The Indian government has made enormous progress in improving the nation’s infrastructure. In 2015, Prime Minister Narendra Modi launched the “Smart Cities” initiative, with plans to develop 100 cities nation-wide. This includes upgradation of existing cities, construction of flyovers and expressways, and laying down new network of roads, bridges, ports, and airports.
Demonetization
In November 2016, the government announced demonetization of 500 and 1,000 rupee notes, in an attempt to combat corruption and illegal activities such as tax evasion and money laundering. As a result, traditional transactions between businesses and customers have deteriorated, causing a dent in the growth of the economy.
Tax Reforms
India has implemented many reforms to simplify the tax system and make it easier for businesses to start and operate. These tax reforms have reigned in the size of the informal economy, making it easier for businesses to do business without the burden of a complex bureaucracy.
India’s economy continues to grow at a healthy pace, with reforms and initiatives making it an attractive place for international business and investment. With a rapidly growing population, ample investment capital, and a technology-savvy infrastructure, India’s economic prospects are looking brighter than ever.