India Economy Profile 2009

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. Slightly more than half of the work force is in agriculture, leading the United Progressive Alliance (UPA) government to articulate a rural economic development program that includes creating basic infrastructure to improve the lives of the rural poor and boost economic performance. The government has reduced controls on foreign trade and investment. 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 remains stalled and continues to generate political debate; populist pressure from within the UPA government had restrained needed initiatives. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. India achieved 9.6% GDP growth in 2006, 9.0% in 2007, and 6.6% in 2008, significantly expanding manufactures through late 2008. India also 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. Strong growth combined with easy consumer credit, a real estate boom, and fast-rising commodity prices fueled inflation concerns from mid-2006 to August 2008. Rising tax revenues from better tax administration and economic expansion helped New Delhi make progress in reducing its fiscal deficit for three straight years before skyrocketing global commodity prices more than doubled the cost of government energy and fertilizer subsidies. The ballooning subsidies, amidst slowing growth, brought the return of a large fiscal deficit in 2008. In the long run, the huge and growing population is the fundamental social, economic, and environmental problem.

GDP (purchasing power parity)

$3.297 trillion (2008 est.)
$3.069 trillion (2007 est.)
$2.816 trillion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$1.21 trillion (2008 est.)

GDP - real growth rate

7.4% (2008 est.)
9% (2007 est.)
9.7% (2006 est.)

GDP - per capita (PPP)

$2,900 (2008 est.)
$2,700 (2007 est.)
$2,500 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 17.6%
industry: 29%
services: 53.4% (2008 est.)

Population below poverty line

25% (2007 est.)

Labor force

523.5 million (2008 est.)

Labor force - by occupation

agriculture: 60%
industry: 12%
services: 28% (2003)

Unemployment rate

6.8% (2008 est.)
7.2% (2007 est.)

Household income or consumption by percentage share

lowest 10%: 3.6%
highest 10%: 31.1% (2005)

Distribution of family income - Gini index

36.8 (2004)
37.8 (1997)

Investment (gross fixed)

39% of GDP (2008 est.)

Budget

revenues: $126.7 billion
expenditures: $202.6 billion (2008 est.)

Public debt

61.3% of GDP (2008 est.)
59.7% of GDP (2004 est.)

Inflation rate (consumer prices)

8.3% (2008 est.)
6.4% (2007 est.)

Central bank discount rate

NA% (31 December 2008)
6% (31 December 2007)

Commercial bank prime lending rate

8.5% (31 January 2009)

Stock of money

$NA (31 December 2008)
$250.9 billion (31 December 2007)

Stock of quasi money

$NA (31 December 2008)
$647.3 billion (31 December 2007)

Stock of domestic credit

$NA (31 December 2008)
$769.3 billion (31 December 2007)

Industries

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

Industrial production growth rate

4.8% (2008 est.)

Electricity - production

665.3 billion kWh (2007 est.)

Electricity - production by source

fossil fuel: 81.7%
hydro: 14.5%
nuclear: 3.4%
other: 0.3% (2001)

Electricity - consumption

517.2 billion kWh (2006 est.)

Electricity - exports

378 million kWh (2006 est.)

Electricity - imports

3.189 billion kWh (2006 est.)

Oil - production

880,500 bbl/day (2007 est.)

Oil - consumption

2.722 million bbl/day (2007 est.)

Oil - imports

2.159 million bbl/day (2005 est.)

Oil - exports

450,700 bbl/day (2005 est.)

Oil - proved reserves

5.7 billion bbl (1 January 2008 est.)

Natural gas - production

31.7 billion cu m (2007 est.)

Natural gas - consumption

41.7 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

10 billion cu m (2007 est.)

Natural gas - proved reserves

1.075 trillion cu m (1 January 2008 est.)

Current Account Balance

-$37.51 billion (2008 est.)
-$10.88 billion (2007 est.)

Agriculture - products

rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes; onions, dairy products, sheep, goats, poultry; fish

Exports

$176.4 billion (2008 est.)
$150.7 billion (2007 est.)

Exports - commodities

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

Exports - partners

US 12.9%, China 11%, UAE 8.8%, Singapore 4.1% (2008)

Imports

$305.5 billion (2008 est.)
$231.6 billion (2007 est.)

Imports - commodities

crude oil, machinery, gems, fertilizer, chemicals

Imports - partners

China 11.8%, US 6.8%, Singapore 4.4%, Germany 4.3%, Australia 4.1% (2008)

Reserves of foreign exchange and gold

$256.4 billion (31 December 2008 est.)
$273.9 billion (31 December 2007 est.)

Debt - external

$229.3 billion (31 December 2008 est.)
$206 billion (31 December 2007)

Stock of direct foreign investment - at home

$144.2 billion (31 December 2008 est.)
$103.1 billion (31 December 2007 est.)

Stock of direct foreign investment - abroad

$58.18 billion (31 December 2008 est.)
$38.82 billion (31 December 2007 est.)

Market value of publicly traded shares

$645.5 billion (31 December 2008)
$1.819 trillion (31 December 2007)
$818.9 billion (31 December 2006)

Economic aid - recipient

$1.724 billion (2005)

Currency (code)

Indian rupee (INR)

Currency (code)

INR

Exchange rates

Indian rupees (INR) per US dollar - 43.319 (2008 est.), 41.487 (2007), 45.3 (2006), 44.101 (2005), 45.317 (2004)

Fiscal year

1 April - 31 March