Indian Economy – Definition, Importance, and Highlights

The Indian economy is by far the most important aspect of the country itself. We begin to learn about it in our primary classes of history and then take an interest in it by participating in political discussions, understanding the nation’s current GDP growth rate and means of economic development. If one wants to understand how India works or where it stands in the worldwide forum, learning and knowing about the Indian economy is where you start. 

Indian economy: a brief 

As per Indian economy 2020, the country has a middle-income developing market economy type. Based on nominal GDP, India is the sixth-largest, whereas, by PPP, it is the third-largest. Since the independence of India in 1957, when the condition of India’s growth and the economy was bad, the government had invented policies, passed schemes, made laws, and created acts just to increase and better the country’s GDP growth rate. The Indian economy is where the heart of the country lies. Since the 21st-century, India has witnessed a GDP growth rate from 6% to 7%. And after China, India is now the second-fastest country which has been showing real signs of economic growth.

The basic and simple reason behind India’s economic positivity is that it has a huge population and low dependency ratio. India’s 70% of GDP is affected and driven by domestic private consumption of things, sectors, and trades. 

According to the Indian economy 2020, the largest and most influential economic partners of India have been the United States, China, the United Arab Emirates (UAE), Saudi Arabia, Switzerland, Germany, Hong Kong, Indonesia, South Korea, and Malaysia. According to the reports in the years 2019-2020, these foreign countries have invested 74.4 billion in India for trades and businesses. 

The service sector, which is one of the most important sectors for India’s growth and income, is responsible for 50% of India’s GDP income. The service sector is also one of the fastest and largest growing sectors of India’s current situation. After the service sector, the other two sectors which also determine the country’s income rate are the industrial and agricultural sectors, which by far are responsible for the highest labor hiring and employment. These growing sectors help to analyze India’s economic status in the world economy. 

Some recent economic highlights

• India’s exports in various merchandise trades witnessed 299.74 billion in US dollars from April 2021 to December 2021
• India’s GST revenue collection got a 15% rise and stood at Rs. 1.38 trillion, which in US dollar is dollar 18.42 billion in January 2022
• India saw inflation in CPI- Consumer Price Index by 5.20% in 2021 April to 2022 December
• The foreign portfolio investors invested an estimated Rs 50,009 crore, which is 6.68 billion in US dollars in India

Some important government steps are taken for the Indian economy

• In May 2021, the government made an invested Rs. 2,250 crore (US$ 306.80 million) for the development in the horticulture sector 
• The number of foreign companies set-ups in India is also increasing, for example, Make in India and Digital India
• National Bank for Financing Infrastructure and Development (NaBFID) will provide non-recourse infrastructure financing
• It will also support, fund and encourage projects from the first quarter of FY 2022-23 by investing up to Rs. 4 lakh crore (US$ 53.58 billion) 
• India is expected to attract investment of around US$ 100 billion in developing the oil and gas infrastructure in between the period of 2019-23

The Government of India has also taken the initiative to increase public health by investing and spending up to 2.5% of the GDP growth rate by 2025.

Conclusion 

This first and foremost step is to gather an idea on how India as a country is running itself, providing, producing, and investing. One should follow and note the country’s economic status, growth, fall, business, and new aspects. Without the economic aspect of India, one would hardly be able to grasp and conquer the country’s philosophy. The Indian economy gives us an idea of the financial framework, market sizes, profits, business motives of the country. Even if one wants to compare and analyze India’s economic position compared to the world economy, he or she has to dive quite deeper into the studies of India’s economic role and performance.