India Economic Analysis
India’s population estimate as in July 2014 was 1,236,344,631 as noted by the Central Intelligence Agency (2014). The figure can further be divided into about five groups of age structures. The 0-14 year age group makes 28.5%, 15-24 years constitute 18.1% while the 25-54 years make 40.6% of the total population. The group with 55-64 years forms 7% and those aged 65 years and above make 5.8% (Central Intelligence Agency, 2014). The pyramid clearly shows that the age group 25-54 years takes the largest percentage of the population and constitutes the working group in the society. The total dependency ratio is 51.8% while the youth dependency ratio is 43.6%. Elderly dependency ratio is 8.1%, and potential support ratio is 12.3%. The population growth rate of India is 1.25%. The birth rate stands at 19.89 births per 1000 while the death rate is 7.35 deaths per 1000. The country experiences a net migration rate of -0.05 migrants per 1000 population. The country recorded a 2.38 percent annual rate of change in terms of urbanization rate, in the year 2014. The total urban population makes 32.4 percent (Ibid) of the total country’s population. The major urban areas have population numbers as follows:
The sex ratio in the country, according to the Central Intelligence Agency (2014), shows that the males are more than females. At birth, the ratio is 1.12 males per one female while the 0-14 year group has 1.13 males per female. The 15-24 year group had 1.13 males per female, and the 25-54 year group had 1.06 males per female and the 55-64 year group had 1.08 males per female. Finally, the group with 65 years and above had 0.91 males per female. According to Mitra (2014) and the Central Intelligence Agency (2014), the total population has 1.08 males per female. In all the groups except the 65 year and above, the males are more than the females.
India has recorded poor results in terms of eradicating gender-based disparities, and in the World Economic Forum’s 2014 gender gap index it has ranked 114 out of 142 countries (2015 Index of Economic Freedom, 2015). The country has scored below average in parameters such as educational attainment, economic participation and health and survival. In the year 2014, the country slipped 13 spots from the 2013 ranking of 101 in terms of the Gender Gap Index as per the World Economic Forum. India is one of the 20 countries in the world, which are performing worst in terms of estimated earned income, labor force participation, and sex ratio at birth and literacy rate indicators.
There has been an increase in income inequality in the whole world. India shows a similar trend. India being a well-established middle-income economy in terms of gross GDP had US$ 1.95 trillion in the year 2012 (Mondal, 2013). At that time, the country was the tenth richest in the country. However, the country ranks 149 in the world in terms of income per capita, and it is home to the highest number of poor people in the world. The number of those living below the poverty line was over 300 million in the year 2011 (Goyal, 2014). However, other researchers have classified the economic groups into rich, middle-class, aspirant middle-class and deprived. The rich households form 1.3% of the population and earn $35,000 and over per year as noted by Sharma (2014). The middle-class makes 13% of the population (160 million) and earns $8,000 to $35,000 per year. The aspirant middle-class households, who form 30% of the population (359 million), earn $3,000 to $8,000 annually (2015 Index of Economic Freedom, 2015). The deprived households make 57% of the population (684 million) and earn below $3,000 per year.
Infrastructure, which is a crucial economic driver, is highly influential in propelling the overall development of India. Economic infrastructure in India includes power, roads, bridges, dams and urban development. In the next 4-5 years, the power sector has an investment potential of US$ 250 billion (IBEF, 2015), which will provide great opportunities for power generation, transmission, distribution, and equipment.
According to IBEF (2015), the period between April to December 2014 saw Indian Railways record Rs 114,656.13 crore (US$ 18.42 billion) while the same period for the year 2013 recorded Rs 101,856.45 crore (US$ 16.37 billion). Thus, there was an increase of 12.57 per cent.
There has been a rapid growth in the telecommunications sector of India. There are a number of private companies that have received land based service licenses to carry out the laying of telephone cables. This took place noting the low connectivity across India.
The Department Of Industrial Policy and Promotion (DIPP) reported that the foreign direct investment (FDI) received in the construction development sector of India from April 2000 to 2015, January stood at US$ 24,028.19 million (MOODY’S 2015). The country has attractive recent developments. The government of India has planned to invest US$ 137 billion in its rail network in the next five years. The plan will see a rapid economic growth as the rail infrastructure will facilitate transportation for businesses. Several companies are investing in the air transport, real estate, ports, factories, and banking. All these will influence enormous economic growth for the country.
In terms of the banking sector, India has been facing tough times in financial services. The India’s Unit Trust (UTI) US-64 had been facing extreme difficulties in the recent past. There were massive fund withdrawals from banks when equity prices fell in 1996 (Ahluwalia, 2012). The phenomenon affected business corporations negatively and also the country’s economy.
Forecasts show a positive economic growth for India. The port sector has been poised to realize enormous progress such that port traffic, by the end of 2017, will amount to 943.06 MT for the major ports and for the minor ports it will be 815.20 MT (IBEF, 2015). Industry estimates show that by the year 2020, the Indian aviation market will be the third largest in the world. The projections show that the sector will handle 85 million international and 336 domestic passengers. The accompanying projected investment for this is approximately US$ 120 billion.
India is a peninsula, with the Bengal Bay to the east, the Arabian Sea to the east and to the south, the Indian Ocean. The Himalayan Mountains are between the India, Asia and China. The total area of India is 3,287,263 sq km, which comprises of 2,973,193 sq km of land and 314,070 sq km covered by water masses (Sanyal, 2012). Economies of agglomeration are so crucial in influencing the economic growth of a country. The fact that India has populous urban centers such as New Delhi, Mumbai, and Kolkata amongst others makes the country stay on a vantage point. These urban areas form crucial hubs for business. India records the second largest population of the globe after China. The population posits a large market for goods. However, this does not create a big impact because most people are poor in India.
2015 Index of Economic Freedom. (2015). India. Available at http://www.heritage.org/index/country/india
Ahluwalia, I. J. (2012). India's economic reforms and development: Essays for Manmohan Singh. Oxford University Press.
Asia, F. (2014). Who's To Blame For The Increasing Gap Between The Rich And The Poor? Market Policies, Says New Report. Available at http://www.forbes.com/sites/meghabahree/2014/11/05/whos-to-blame-for-the-increasing-gap-between-the-rich-and-the-poor-market-economy-says-new-report/
Central Intelligence Agency. (2014). The World Fact Book. Available at https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
Goyal, A. (2014). History of Monetary Policy in India Since Independence. Springer.
IBEF. (2015). Infrastructure. India Brand Equity Foundation. Available at http://www.ibef.org/industry/infrastructure-sector-india.aspx
Mitra, A. (2014). India's Populations - Aspects of Quality and Control (Vol. II) Abhinav Publications.
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MOODY’S. (2015).India: detailed economic analysis, indicators and forecasts. Available at https://www.economy.com/dismal/countries/IIND
Sanyal, S. (2012). Land of the Seven Rivers: A Brief History of India's Geography. Viking.
Sharma, S. D. (2014). ‘India Rising’and the Mixed Blessings of Globalisation. India Quarterly: A Journal of International Affairs, 70(4), 283-297.