Economy of India

In 2009, India's nominal GDP stood at US$1.243 trillion, which makes it the
eleventh-largest economy in the world.[116] If PPP is taken into account, India's
economy is the fourth largest in the world at US$3.561 trillion,[117] corresponding to a
per capita income of US$3,100.[118] The country ranks 139th in nominal GDP per
capita and 128th in GDP per capita at PPP.[116] With an average annual GDP growth
rate of 5.8% for the past two decades, India is one of the fastest growing economies in
the world.[119]

From the 1950s to the 1980s, India followed socialist-inspired policies. The economy
was shackled by extensive regulation, protectionism and public ownership, leading to
pervasive corruption and slow economic growth.[120] In 1991, the nation liberalised its
economy and has since moved towards a free-market economy.[121][122] The policy
change in 1991 came after an acute balance of payments crisis, and the emphasis
since then has been to use foreign trade and foreign investment as integral parts of
India's economy.[123] Currently, India's economic system is portrayed as a capitalist
model with the influx of private sector enterprise.[122]

India has the world's second largest labour force, with 467 million people.[124] In terms
of output, the agricultural sector accounts for 28% of GDP; the service and industrial
sectors make up 54% and 18% respectively. Major agricultural products include rice,
wheat, oilseed, cotton, jute, tea, sugarcane, potatoes.[63] Major industries include
textiles, telecommunications, chemicals, food processing, steel, transport equipment,
cement, mining, petroleum, machinery and software.[63] India's external trade has
reached a relatively moderate share of 24% of GDP in 2006, up from 6% in 1985.[121]
In 2008, India's share of world trade was about 1.68%;[125] as of 2009, it is the world's
fifteenth largest importer and eighteenth largest exporter.[126] Major exports include
petroleum products, textile goods, gems and jewelry, software, engineering goods,
chemicals, and leather manufactures.[63] Major imports include crude oil, machinery,
gems, fertiliser, chemicals.[63]

Tata Nano, the world's cheapest car.[127] India's annual car exports have surged
fivefold in the past five years.[128]

During the late 2000s, India's economic growth averaged 7.5% a year.[121] Over the
past decade, hourly wage rates in India have more than doubled.[129] According to a
2007 McKinsey Global Institute report, since 1985, India's robust economic growth
has shifted 431 million Indians out of poverty and by 2030, India's middle class
population will rise to more than 580 million people.[130] In 2009, the Global
Competitiveness Report ranked India 16th in financial market sophistication, 24th in
banking sector, 27th in business sophistication and 30th in innovation; ahead of
several advanced economies.[131] Seven of the world's top 15 technology outsourcing
companies are based in India and the country is viewed as the second most favourable
outsourcing destination after the United States.[132] India's consumer market is
currently the world's thirteenth largest and is expected to become the fifth largest by
2030.[130] India has the world's fastest growing telecommunication industry, adding
about 10 million subscribers during 2008-09 period.[133] The country has the world's
second fastest growing automobile industry, with domestic sales increasing by 26%
during the 2009-10 period[134] and exports increasing by 36% during the 2008-09
period.[135]

Despite India's impressive economic growth over recent decades, it still contains the
largest concentration of poor people in the world.[136] The percentage of people living
below the World Bank's international poverty line of $1.25 a day (PPP, in nominal
terms 21.6 a day in urban areas and 14.3 in rural areas in 2005) decreased from
60% in 1981 to 42% in 2005.[137] Since 1991, inter-state economic inequality in India
has consistently grown; the per capita net state domestic product of India's richest
states is about 3.2 times that of the poorest states.[138] Even though India has avoided
famines in recent decades, half of children are underweight[139] and about 46% of
Indian children under the age of three suffer from malnutrition.[140][136][141]

A 2007 Goldman Sachs report projected that "from 2007 to 2020, India’s GDP per
capita will quadruple," and that the Indian GDP will surpass that of the United States
before 2050, but India "will remain a low-income country for several decades, with
per capita incomes well below its other BRIC peers."[142] Although the Indian
economy has grown steadily over the last two decades; its growth has been uneven
when comparing different social groups, economic groups, geographic regions, and
rural and urban areas.[136] The World Bank suggests that India must continue to focus
on public sector reform, infrastructure, agricultural and rural development, removal of
labour regulations, improvement in transport, energy security, and health and
nutrition.