Economy-overview:

India’s economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of support services. 67% of India’s labor force, nearly 400 million work in agriculture. Agriculture contributes 30% of the country’s GDP. Production, trade, and investment reforms since 1991 have provided new opportunities for Indian businesspersons and an estimated 300 million middle class consumers. New Delhi has avoided debt rescheduling, attracted foreign investments, and revived confidence in India’s economic prospects since 1991. Many of the country’s fundamentals including savings rates (26% of GDP) and reserve (now about $24 billion)-are healthy, Inflation eased to 7% in 1997, and interest rates dropped to between 10% and 13%. Even so, the Indian Government needs to restore the early momentum of reforms, especially by continuing reductions in the extensive remaining government regulations. Moreover, economy policy changes have not yet significantly increased jobs or reduced the risk that international financial strain will bring within the next few years. Nearly 40% of the Indian Population remains too poor to afford a nutrient diet. India exports, and foreign institutional investment were affected by the East Asian crisis in late 1997 and early 1998, but capital account controls, a low ratio of short-term debt to reserves, and enhanced supervision of the financial sector helped insulate it from near term balance-of-payments problems. Export growth, has been slipping in 1996-97, averaging only about 4% to 5%-a large drop from the more than 20% increases it was experiencing over the prior three years. Energy, telecommunications, and transportation shortages and the legacy of inefficient factories constrain industrial growth which expanded only 6.7% in 1997-down from more than 11% in 1996. Growth of agricultural sector is still fairly slow rebounding to only 5.7% in 1997 from a fall of 0.1% in 1996. Agricultural investment has slowed, while costly subsidies on fertilizer, food distribution, and rural electricity remains. Nevertheless, even if a series of weak coalition governments continue to rule in New Delhi for the next few years and are able to push reforms aggressively, parts of the economy that have already benefited from deregulation will continue to grow. 

 GDP:

Composition by sector:

Inflation rate-consumer price index: 7% (1997 est.).

Labour force:

Total: 390 million 91997 est.).

By occupation: agriculture 67%, services 18%, industry 15% (1995 est.).

Budget:   

Industries: 

Textiles, chemicals, food processing, steel, transportation equipment, cement, mining petroleum machinery. 

Industrial production growth rate: 6.7% (1997 est.).

Electricity-capacity: 83.288 million kW (1996). 

Electricity-production: 398.28 billion kWh (1995). 

Electricity - consumption per capita: 427 kWh (1995).

Agriculture - products: 

Rice, wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep, goats, poultry; fish catch of about 3 million metric tons ranks India among the world’s top 10 fishing nations.

Exports: 

Total value: $33.9 billion (f.o.b., 1997).

Commodities: gems and jewelry, clothing, engineering goods, chemicals, leather manufactures, cotton yarn, and fabric; Partners: US, Hong Kong, UK, Germany. 

Imports: 

Total value: $39.7 billion (c.i.f., 1997).

Commodities: crude oil and petroleum products, machinery, gems, fertilizer, chemicals, partners: US, Belgium, Germany, Kuwait, Saudi Arabia, UK, Japan.

Economic aid: 

Recipient: ODA, $10237 billion (1993); US ODA bilateral commitments $171 million; US Ex-Im bilateral commitments $680 million; Western (non-US) countries, ODA bilateral commitments $2.48 billion; OPEC bilateral aid $200 million; World Bank (IBRD) multilateral commitments 42.8 billion; Asian Development Bank (ADB) multilateral commitments $670 million; International Finance Corporation (IFC) multilateral commitments $200 million; other multilateral commitments $554 million (1995-96).

Currency: 

1 Indian rupee (Re) = 100 paise.

Exchange rates: 

Indian rupees (Rs) per US$1-39.358 (January 1998), 36.313 (1997), 35.433 (1996), 32.427 (1995), 31.374 (1994), 30.493 (1993)

Fiscal year: 1 April-31 March