Indian Economy Overview, Market Size and Growth

Indian Economy Overview, Market Size and Growth

  1. Overview

In India, the economy followed a model inspired by socialism during almost all of its recent history, with strong state control over the private sector, foreign investment and foreign trade. However, since the decade of the 90s, India has been gradually opening its domestic market, reducing government control over foreign trade and capital mobilization.

Overview

In addition to the above, the opening of hundreds (if not “thousands”) of sectors to international investors and, in addition, the privatization of many sectors of the public industry, have caused that traditional socialism has withdrawn from the economy India, in the midst of many discussions, in many forums, on whether or not these measures of privatization and economic opening.

One factor that should never be lost sight of when talking about the economy of this Asian country is the accelerated rate of population growth, which has been one of the most important causes of the enormous socioeconomic inequalities of the Indian population. In this virtue, poverty (almost generalized) remains a serious problem.

However, this poverty has gradually decreased, thanks to the so-called “Green Revolution” and the aforementioned macroeconomic measures. Thus, during the last two decades, the Indian economy has presented an annual GDP growth rate of close to 5.8%, which is why it has become one of the fastest growing economies in the world.

  1. Market size

During the period between 2003 and 2007, the economic growth of India raised its average to the very important figure of 8.5%, which has generated an intense debate, worldwide, about the prospects for growth of this country. In this regard, we must note that rapid, sustained, sustainable and sustainable economic growth is a necessary (but not sufficient) condition to drastically reduce poverty levels and, in turn, increase the levels of the average quality of life of their habitants.

The goal of India is to have a growth of 9%, a figure that was set by the Indian government for the so-called “Eleventh Five-Year Plan”. Obviously, should that goal be achieved, India will emerge as the world’s fourth-largest economy, according to specialized studies conducted by McKenzie International and Goldman Sachs. Thus, its impact on the total demand for basic products at the global level and, also, on the flow of resources of all kinds (human, technological and financial, among others), will be decisive in the Indian economy and, why not, in the whole world.

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On the other hand, let us say that India is developing as a free market economy, contrary to what happened before, when the prevailing socialism advocated intervention, almost total, in all economic sectors. At present, however, public companies are being privatized, controls on international trade and foreign direct investment are being reduced, while today, India has the fifth largest economy in the world in terms of GDP parity. Purchasing Power or “PPA”, with something even better in between: a Gross National Product or “GNP” of 4.06 trillion dollars, to 2013 figures.

  1. Growth

According to a relatively recent report by Goldman Sachs, it is expected that from 2007 to 2020, the GDP per capita (per capita) of this country could quadruple perfectly. In this way, India’s GDP will surpass, by far, that of the United States, by the year 2050, according to detailed studies of several economic analysis companies.

India’s GDP will surpass, by far, that of the United States, by the year 2050

However, “everything is not rosy” because that constant and sustained growth has been reflected unevenly if we compare the quality of life of different sectors of society. According to the World Bank, the fundamental priorities of the government of India, in economic and social matters, for the next two decades are the reform of the public sector, agricultural and rural development, the construction and improvement of infrastructure.