ANALYSIS OF INDIA
India is home to 1.24 billion people, which is about 17.5 per cent of the global population. The Indian economy is the 12th largest in USD exchange rate terms. India is the second fastest growing economy in the world. However, it accounts for only 2.98 per cent of world GDP in US dollar terms and 5.0 per cent in purchasing power parity (ppp) terms. Hence, there exists a huge potential for catch up. The global welfare too is linked to progress in India as reflected in the keen global interest in India. But, India seems to inspire and disappoint at the same time. This is reflected in various comments on the Indian economy. The below graph represents the National Income Trend of India for the period of 1950 – 2011.
The GDP growth curve is showing a steep slope from 1950s to 1980s with a very little increase of about 1.4 %. The main reasons that hindered the growth are Levels of infrastructure :
Infrastructure contributes significantly to economic development both by increasing productivity and by providing amenities that enhance the quality of life. The impact of infrastructure on economic growth is well documented internationally. In the Indian context, elasticities of output with respect to various stocks of infrastructure indicate that the transport and communication sectors play a dominant role in explaining the variations in GDP and its sub-sectors. The index of industrial production is also found to track closely the movements in the composite index of infrastructure industries during the 1980s and the 1990s. Without necessary infrastructure it can be difficult for firms to be competitive in the international markets. This lack of infrastructure is often a factor holding back some developing economies.
Development of Technology :
Development in technology is a key factor in enabling improved productivity and higher economic growth. Technology of an economy is influencing the lives of its people...