India Economy Profile 2007

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. 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. The government has reduced controls on foreign trade and investment. Tariffs averaged 12.5% on non-agricultural items in 2006. 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 remained stalled in 2006, and continues to generate political debate; populist pressure from within the UPA government and from its Left Front allies continues to restrain needed initiatives. The economy has posted an average growth rate of more than 7% in the decade since 1996, reducing poverty by about 10 percentage points. India achieved 8.5% GDP growth in 2006, 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. Economic expansion has helped New Delhi continue to make progress in reducing its federal fiscal deficit. However, strong growth - more than 8 percent growth in each of the last three years - combined with easy consumer credit and a real estate boom is fueling inflation concerns. The huge and growing population is the fundamental social, economic, and environmental problem.

GDP (purchasing power parity)

$4.156 trillion (2006 est.)

GDP (official exchange rate)

$804 billion (2006 est.)

GDP - real growth rate

9.2% (2006 est.)

GDP - per capita (PPP)

$3,800 (2006 est.)

GDP - composition by sector

agriculture: 19.9%
industry: 19.3%
services: 60.7% (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)

5.3% (2006 est.)

Investment (gross fixed)

29.2% of GDP (2006 est.)

Labor force

509.3 million (2006 est.)

Labor force - by occupation

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

Unemployment rate

7.8% (2006 est.)

Distribution of family income - Gini index

32.5 (2000)

Budget

revenues: $109.4 billion
expenditures: $143.8 billion; including capital expenditures of $15 billion (2006 est.)

Public debt

52.8% of GDP (federal and state debt combined) (2006 est.)

Industries

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

Industrial production growth rate

7.5% (2006 est.)

Electricity - production

630.6 billion kWh (2004)

Electricity - consumption

587.9 billion kWh (2004)

Electricity - exports

60 million kWh (2004)

Electricity - imports

1.5 billion kWh (2004)

Oil - production

785,000 bbl/day (2005 est.)

Oil - consumption

2.45 million bbl/day (2004 est.)

Oil - imports

2.09 million bbl/day (2005 est.)

Oil - exports

350,000 bbl/day (2005 est.)

Oil - proved reserves

5.6 billion bbl (2006 est.)

Natural gas - production

28.2 billion cu m (2004 est.)

Natural gas - consumption

30.83 billion cu m (2004 est.)

Natural gas - exports

0 cu m (2004 est.)

Natural gas - imports

2.63 billion cu m (2004 est.)

Natural gas - proved reserves

853.5 billion cu m (1 January 2005 est.)

Current Account Balance

-$26.4 billion (2006 est.)

Agriculture - products

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

Exports

$112 billion f.o.b. (2006 est.)

Exports - commodities

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

Exports - partners

US 17.4%, UAE 8.5%, China 7.9%, UK 4.4% (2006)

Imports

$187.9 billion f.o.b. (2006 est.)

Imports - commodities

crude oil, machinery, gems, fertilizer, chemicals

Imports - partners

China 8.5%, US 5.9%, Germany 4.5%, Singapore 4.5% (2006)

Reserves of foreign exchange and gold

$165 billion (2006 est.)

Debt - external

$132.1 billion (30 June 2006 est.)

Economic aid - recipient

$2.9 billion (FY98/99)

Currency (code)

Indian rupee (INR)

Exchange rates

Indian rupees per US dollar - 45.3 (2006), 44.101 (2005), 45.317 (2004), 46.583 (2003), 48.61 (2002)

Fiscal year

1 April - 31 March