The Indian Economy
India has one of the largest and fastest growing economies in the world. Unfortunately it is also one of the poorest countries in the world. The main reason for this is the very large population that the country has. There has been strong growth in recent years as the government has made a concerted effort to improve the economic strength of the nation. There is however still a long way to go. There have certainly been areas of improvement but it has been very uneven. The result is a country in which there is a large high tech sector while at the same time a large percentage of the population is still engaged in traditional small scale farming.
For many years the Indian economy struggled due to poor government policy. There were way too many regulations designed to limit foreign investment. There was also a great deal of red tape that had to be navigated if you wanted to start a business. This had a serious impact on the economy and in the early nineties the government decided that liberalizing the economy would be the best way to encourage growth. In large part they have succeeded in doing this. Although agriculture still remains the largest industry in the country the growth has mainly been in the service and manufacturing sectors.
The growth of the Indian economy is somewhat unusual in that it has done so with very little export. Compared to a country like China that has relied heavily on manufacturing products for export India has exported very little. Most of the growth has been because of consumer demand within the country and by lots of travelers coming to India for health tourism. This has resulted in slower growth than China has had recently but it has also been more stable. India came through the recent global financial crisis virtually unscathed because so little of its economy depends on foreign trade.
One of the great strengths that India has as it attempts to grow its economy is its very good education system. India has become a major player in the high tech field because of its highly educated workforce. Unfortunately this education is very unevenly spread. A relatively small group of people receive a very good education while a much larger group receives little if any education. The result is that there is a fairly high rate of unemployment in India despite the economic growth of the country. Given the massive population this is unlikely to change anytime soon.
There are a few issues that are hindering the growth of the Indian economy that will need to be overcome. The biggest is a lack of resources, particularly in the energy sector. The country is heavily dependent on resources imported from other countries. The other big issue that will need to be dealt with is a need to improve the infrastructure. This is especially true when it comes to things like electricity.