INDIA’S GDP LOW, WHY ?

Book excerpt: India is the second most populous country in the world. India’s economy is characterized by marginalization and exclusion due to social inequalities. Low rates of female participation in the labor force has also hampered the growth of the Indian economy. The majority of businesses in India are small-scale enterprises (SSEs). It does not have adequate skilled workers given that its system of offering vocational training is not tailor-made to address the specific needs of the informal or casual labor force which makes up for at least 90% of the total workers in India. State governments play a major role in the allocation of resources as they account for approximately 57% of total expenditure in India. Most Indian firms depend on politicians and public officials for resources supplied by the government to facilitate various aspects of their operations. Agriculture, manufacturing, and services are the main economic sectors in India. Therefore, they would provide a good indication of the economic health of the country. India has one of the largest service sectors in the world and is the export hub of software services. Its market share in the total global outsourcing market is approximately 55%. India’s middle class is expected to grow economically to account for 17% of the global consumption, which would be second largest in the world. Increase in the young working population is also expected to contribute towards the future growth of the manufacturing sector in India. India is the 7th largest country in the world in terms of national nominal GDPs. But, the GDP does not commensurate with the population it boasts of as the per capita income is very low and lesser than per capita income of Argentina, Malaysia,Mexico, and Nigeria. It is also the third largest economy in the world in terms of national purchasing power parity (PPP). However, India is striving to achieve economic development to match the economies of developed nations. India has a long way to go to match these economies. This book deals with the finer aspects of India’s GDP and introspects the reasons for its low GDP.