Give the importance of services. In what ways are they responsible for the growth of Indian economy?
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India has followed a different path of development from many other countries. India went more quickly from agriculture to services that tend to be less tightly regulated than heavy industry. That said there are some emerging manufacturing giants in the Indian economy.
Supply-side factors supporting Indian growth and development
A fast-growing population of working age. There are 700 million Indians under the age of 35 and the demographics look good for Indian growth in the next twenty years at least. India is India is experiencing demographic transition that has increased the share of the working-age population from 58 percent to 64 percent over the last two decades.
India has a strong legal system and many English-language speakers – this has been a key to attracting inward investment from companies such as those specialising in IT out-sourcing.
Wage costs are low in India and India has made strides in recent years in closing some of the productivity gap between her and other countries at later stages of development.
India's economy has successfully developed highly advanced and attractive clusters of businesses in the technology space – witness the rapid emergence of Bangalore as a hub for global software businesses. External economies of scalehave deepened their competitive advantages in many related industries.
Growth and Development Limiters for India
Despite optimism for India's prospects for economic growth and development, there are a number of obstacles which may yet see growth and development falter.
Poor infrastructure - notably in transport and power networks
Low productivity and weak human capital. A high % of workers are low-skilled and work in small businesses
High inflation and a persistent trade deficit
Low national savings as a share of GDP, low share of capital investment
Relatively closed economy - India is a net importer of primary products
Indian Development – An Infrastructure Gap
India is a good case study to use when discussing the problems that persist when a country cannot rely on adequate critical infrastructure such as roads, railways, power and basic sanitation. India wants to build $1 trillion worth of infrastructure in the next five years but the government expects the private sector to fund half of it – this is unlikely! Poor infrastructure hurts the Indian economy in numerous ways:
Supply-side factors supporting Indian growth and development
A fast-growing population of working age. There are 700 million Indians under the age of 35 and the demographics look good for Indian growth in the next twenty years at least. India is India is experiencing demographic transition that has increased the share of the working-age population from 58 percent to 64 percent over the last two decades.
India has a strong legal system and many English-language speakers – this has been a key to attracting inward investment from companies such as those specialising in IT out-sourcing.
Wage costs are low in India and India has made strides in recent years in closing some of the productivity gap between her and other countries at later stages of development.
India's economy has successfully developed highly advanced and attractive clusters of businesses in the technology space – witness the rapid emergence of Bangalore as a hub for global software businesses. External economies of scalehave deepened their competitive advantages in many related industries.
Growth and Development Limiters for India
Despite optimism for India's prospects for economic growth and development, there are a number of obstacles which may yet see growth and development falter.
Poor infrastructure - notably in transport and power networks
Low productivity and weak human capital. A high % of workers are low-skilled and work in small businesses
High inflation and a persistent trade deficit
Low national savings as a share of GDP, low share of capital investment
Relatively closed economy - India is a net importer of primary products
Indian Development – An Infrastructure Gap
India is a good case study to use when discussing the problems that persist when a country cannot rely on adequate critical infrastructure such as roads, railways, power and basic sanitation. India wants to build $1 trillion worth of infrastructure in the next five years but the government expects the private sector to fund half of it – this is unlikely! Poor infrastructure hurts the Indian economy in numerous ways:
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India is experiencing a demographic transition that has increased the share of the working-age population from 58 percent to 64 percent over the last two decades. There are 700 million Indians under the age of 35 and the demographics look good for Indian growth in the next twenty years at least.
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