After facing three centuries of absolute poverty, in the recent decades, India began to climb up to become the force to reckon with in the global economy. This growth has been accelerated in the last few decades.
In the first thirty years after independence, the growth of the Indian economy was quite low. Even though the growth was gradual, improvement was sustained to produce an average growth rate of 5.7% per year for 20 years to the year 2000.
Building on the base created up to the year 2000, the Indian economy seems to have achieved a reasonable take-off to a higher growth. This growth has seen the real GDP growing at an average rate of 8.1% per annum during the 2003-2004 to 2005-2006 year. In the 11th 2007-2012 five year plan period, an 8.5% growth rate was achieved. While there are still many challenges in place, the major challenge is that of creating a more inclusive growth of Indian economy by reduction of entrenched poverty.
It’s evident that the country has created a major milestone through its 67 years since its release from colonial rule. Nevertheless, fast growth rate of the population and the infrastructure woes signal that there’s still more to be done.
The country’s GDP has grown to Rs 57 lakh crore from Rs 2.7 during its 67 years of liberation.
Percentage annual GDP growth
During the period 2005-2006 to 2007-2008, the economic growth of the country surged to almost a double digit level as compared with the poor growth during the early years after independence. This growth has however slowed to a sub 5% level during the last financial year as a result of the slowdown in the global economies and absence of needed growth based reforms.
Gross domestic savings
India’s gross domestic savings expressed as a GDP percentage has recorded a growth over last decade to reach a 36.8 % of the GDP in the 2008 fiscal year. This ratio has however declined steadily from that to 30% during the 2013 fiscal year. And this raised concerns to the policymakers.
Food grain production
The production of food grain has grown more than double over the post-colonial decades to reach a 264 million tonnes record in 2014 fiscal year. Even though this seems to be a recommendable growth, with the growing population which a quarter of it is estimated to live under the poverty line, India needs to do more than that.
Roads and infrastructure
The periods after independence witnessed the country prospering progressively in the building and construction of infrastructure, especially roads. However, the challenge of poor infrastructure is raising an alarm that the country needs to expand its road networks to the far end villages.
Import and exports
Over the last two decades, the imports to India have risen at a faster rate than the exports causing a wide gap in trade balance. The current account deficit of India widened to 4.8% of the country’s GDP in the 2013 fiscal year, before recording a fall in the 2014 fiscal year after the government’s move to clamp down on the imports of gold.
In the fiscal year of 2014, India’s external debt rose to $440 billion. The external debt comprising of non-government and government lending rose due to the increase of the non-government related debts. In the year ending 2014, the total debts of the government were at $82 billion while the non-government debts were standing at $359 billion.
Even though the growth of India’s economy since 2000 was beneficial to majority of the poor, the achievements of India are modest as compared to other Asian countries. This is a signal that more effort needs to be concerted to make the growth of the economy more inclusive in the near future.