India and China have dominated the world GDP since 1st century CE. Indian GDP over the years have contributed from 25-35% of the whole world GDP. But by the time Britishers left India, it was reduced to a mere 2%. Since then India’s economy has come a long way.
In 1987, the Indian GDP stood at $283 million. But in 2021 it reached to $3+ trillion economy. Hence, the Indian Economy is a motivation for other developing nations. Let us see how the Indian economy had taken a massive turn towards development. It definitely led to a prosperous last decade.
Indian GDP from 2011 – 2021
Indian GDP stood at $1.7 trillion in 2011. In 2021, it has grown to $3.1 trillion, thus growing at 84%. India broke into top-5 nations in terms of Market Capitalisation. In 2011, the M-Cap was $1.6 trillion in 2011.
Indian software industry is another success story. Indian IT services are world class and IT exports have reached an all-time high. In 2011, IT exports were about $47 billion from India. In 2021, IT exports have reached to $252 billion. IT industry has helped India receive more foreign reserves at massive scale.
Indian government has built roads, highways and bridges to connect cities. Making any country accessible is the basic building block of a developed economy. Indian government built 70 thousand km roads in 2011. They were successful in building 142,000 km roads by the end of 2021. It was by 110% increase if compared with 2011.
Air Traffic in India increased massively. In 2011, 60 million people travelled using flights. This number changed to 120 million by 2021. A total increase of 100% when compared with the last decade.
India is one of the biggest player of FinTech in the world. India’s FinTech took off when demonetisation happened in the year 2016. Digital payments in India were $62 billion in 2011. But it has led to a massive increase since then. In 2021, digital payments stood at $482 billion. A total increase of 670% when compared with the last decade.
Startup Ecosystem in India reached humongous heights. In 2011, $1 billion was invested into startups in India. By 2021, this number increased to $44 billion. Today, India has 101 recognised startups with $1+ billion valuation.
Indian Economy Change: From Socialist to Capitalist
Earlier, the Indian Economy followed a socialistic type of economy. Homemade goods were in demand. It was a difficult time for foreign MNCs. Running a business in India became difficult. The ease of doing business in India was difficult during late 20th century.
The Foreign Resolutions Act of 1973 was the nail in the coffin to the Indian GDP. MNCs were asked to sell 60% of their business to local Indian businessmen. Due to this Kotak, Coca Cola and 55 other companies quit their businesses in India.
Indian Economy tried its best to stay afloat but lack of foreign direct investment would inevitably damage the economy in the longer run. India also took huge loans from organisations like World Bank and nations like UK. The economy started to decline from 1989. By 1992, India was left with almost nothing in foreign reserves.
In 1992, new reforms were made and India was opened for the rest of the world. ‘Privatisation, Liberalisation and Globalisation’ was introduced. It invited companies to start investing into India.
The credit for such massive reforms are given to then Prime Minister PV Narasimha Rao. Dr. Manmohan Singh, then Finance Minister, is credited for such economic reforms. India had $1.2 billion in foreign reserves in 1992. Today, India holds $600 billion in foreign reserves.
Still a long way to go for Indian Economy
With all these developments and achievements, we tend to forget the basic needs of the poor people. In the Global Hunger Index (GHI), India was ranked at 101 out of 116 countries in 2021. In 2020, it ranked at 94 out of 107 countries.
India lags behind its neighbours in Human Development Index (HDI). The HDI for India stood at 131st rank. According to global media Reporters Without Borders (RSF), India’s press freedom ranking fell from 142 in 2021 to 150 this year,
COVID-19 and pandemic raised questions about Indian healthcare system. The system requires more hospitals, more funding from the government. It certainly needs more medical students and more medical colleges to meet-up the requirement. Since India only spends 3.6% of its GDP on medical supplies, it needs to increase and meet the demands of people.
Indian Education system needs to work on the deprived sections of the society. Government schools have the worst types of facilities. Whether it is teachers or books or quality of education, everything needs to revamp.
Indian Economy has seen its ups and downs. The growth rate was slowing even before the pandemic. Unemployment and unemployability remains high in India. There is a long way to go, a lot of things are to be looked at. But the good thing is we are growing at our own pace. The government and authorities can help a little if we do not take self initiatives.