International Monetary Fund (IMF) recently mentioned India as the fastest growing economy in the world.
Surpassing China, India has got the recognition of fastest growing economy globally, as per IMF report. India's economic growth is standing at 6.5% while China showed a growth of 4.6%. As India is on its way to become top economies globally, we will find out how Indian government makes money.
Since independence, India has been an agricultural-dominated economy. It is the main source income and revenue. Although industrial sector is performing well in India, majority of Indians are still depending on agricultural products. Currently, India is second-largest producer of fruits in India. This includes mangoes, limes, bananas, papayas, lemon, and so on. Apart from that, India is second largest producer of rice and wheat.
Amidst the warning of climate change, water scarcity, farmers are looking for advanced technologies as well as alternative sources of income.
In FY23, the share of agriculture in India's GDP was 15%.
Chemicals and Petrochemicals are the big industries in India. Since 1970s, India has experienced growth in industrial sector. India is also one of the largest suppliers of pharmaceuticals, automobiles, and steel.
Presence of large mines helped India growing in mining sector like iron ore, limestone, bauxite, asbestos. As per recent statistics, India mined approximately 780 million tons of coal in 2022.
Over the last 50 years, the service sector in India has increased rapidly and has been supporting GDP significantly. India has highly skilled workforce which support the growth if IT and BPO sector. For that purpose, tech giants like Google, Facebook, Microsoft are opening their manufacturing units and offices in India. Since the beginning of 21st century, the growth of BPO has been outstanding. IT and BPO sector contributes at least 9-10% of India's GDP.
Being the most populous country in India, the retail services generates a huge revenue. It is already an one trillion dollar sector contributing around 10% of India's GDP.
Apart from the above-mentioned sectors India is showing progress in renewable energy sources as well as tourism. As per Indian government report, tourism and hospitality sector contributes approximately US$ 178 billion to the nation's GDP. Medical tourism is also a major sector in India. Affordable cost if treatment along with efficient professionals, people across the globe come to India for treatment.
India's top export country is the United States (USA), United Arab Emirates (UAE), Netherlands, and Singapore. Whereas, India's biggest importing partners are China, Russia and USA.
India’s biggest exports are refined petroleum products. Other important exports by value are diamonds, pharmaceutical products, jewelry, as well as rice.
The Reserve Bank of India (RBI) is considered as the central bank. It has the responsibility of regulating the India's currency and credit systems. Since its establishment, RBI ensure financial stability in India.
“Growth in India is projected to remain strong at 6.8 per cent in 2024 and 6.5 per cent in 2025, with the robustness reflecting continuing strength in domestic demand and a rising working-age population,” according to the latest edition of the World Economic Outlook released by the IMF.
“Indeed, India is one of the strong performers. We had a fairly sharp revision in the Fiscal Year 2023 to 2024, the one that is ending, and that has just ended. Then we have 0.3 percentage point upgrade for Fiscal Year 2024 to 2025. So India is doing quite well,” mentioned Pierre-Olivier Gourinchas, chief economist of the IMF in press conference.
