India Economy Profile 2006

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 half of India's output with less than one quarter 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. Government controls on foreign trade and investment have been reduced in some areas, but high tariffs (averaging 20% on non-agricultural items in 2004) and limits on foreign direct investment are still in place. The government in 2005 liberalized investment in the civil aviation, telecom, and construction sectors. Privatization of government-owned industries essentially came to a halt in 2005, and continues to generate political debate; continued social, political, and economic rigidities hold back needed initiatives. The economy has posted an average growth rate of more than 7% in the decade since 1994, reducing poverty by about 10 percentage points. India achieved 7.6% GDP growth in 2005, 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. Despite strong growth, the World Bank and others worry about the combined state and federal budget deficit, running at approximately 9% of GDP; government borrowing has kept interest rates high. Economic deregulation would help attract additional foreign capital and lower interest rates. The huge and growing population is the fundamental social, economic, and environmental problem.

GDP (purchasing power parity)

$3.666 trillion (2005 est.)

GDP (official exchange rate)

$719.8 billion (2005 est.)

GDP - real growth rate

8.4% (2005 est.)

GDP - per capita (PPP)

$3,400 (2005 est.)

GDP - composition by sector

agriculture: 18.6%
industry: 27.6%
services: 53.8% (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)

4.2% (2005 est.)

Investment (gross fixed)

28.1% of GDP (2005 est.)

Labor force

496.4 million (2005 est.)

Labor force - by occupation

agriculture: 60%
industry: 17%
services: 23% (1999)

Unemployment rate

8.9% (2005 est.)

Distribution of family income - Gini index

32.5 (2000)

Budget

revenues: $111.2 billion
expenditures: $135.8 billion; including capital expenditures of $15 billion (2005 est.)

Public debt

53.8% of GDP (federal and state debt combined) (2005 est.)

Industries

textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software

Industrial production growth rate

7.9% (2005 est.)

Electricity - production

556.8 billion kWh (2003)

Electricity - consumption

519 billion kWh (2003)

Electricity - exports

187 million kWh (2003)

Electricity - imports

1.4 billion kWh (2003)

Oil - production

785,000 bbl/day (2005 est.)

Oil - consumption

2.32 million bbl/day (2003 est.)

Oil - imports

2.09 million bbl/day

Oil - exports

350,000 bbl/day

Oil - proved reserves

5.7 billion bbl (2005 est.)

Natural gas - production

27.1 billion cu m (2003 est.)

Natural gas - consumption

27.1 billion cu m (2003 est.)

Natural gas - exports

0 cu m (2001 est.)

Natural gas - imports

0 cu m (2001 est.)

Natural gas - proved reserves

853.5 billion cu m (2005)

Current Account Balance

$-12.95 billion (2005 est.)

Agriculture - products

rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes; cattle, water buffalo, sheep, goats, poultry; fish

Exports

$76.23 billion f.o.b. (2005 est.)

Exports - commodities

textile goods, gems and jewelry, engineering goods, chemicals, leather manufactures

Exports - partners

US 16.7%, UAE 8.5%, China 6.6%, Singapore 5.3%, UK 4.9%, Hong Kong 4.4% (2005)

Imports

$113.1 billion f.o.b. (2005 est.)

Imports - commodities

crude oil, machinery, gems, fertilizer, chemicals

Imports - partners

China 7.3%, US 5.6%, Switzerland 4.7% (2005)

Reserves of foreign exchange and gold

$136 billion (2005 est.)

Debt - external

$125.5 billion (2005 est.)

Economic aid - recipient

$2.9 billion (FY98/99)

Currency (code)

Indian rupee (INR)

Exchange rates

Indian rupees per US dollar - 44.101 (2005), 45.317 (2004), 46.583 (2003), 48.61 (2002), 47.186 (2001)

Fiscal year

1 April - 31 March