The Indian economy

The rise of India on the world economic stage has been heralded for some time now. India’s economy is currently the fifth largest globally and poised to be the third largest by 2027. It is already the third largest in terms of purchasing power parity (PPP) dollars. It is also one of the fastest growing major economies in the world. Yet, with its current per capita income of about USD 2400, India has a long way to transition from a lower-middle income to an upper-middle income country.

While India’s geo-political significance has been growing and many believe that India is poised for an economic take-off, in many ways the Indian economy is at a crossroads. The country’s economic development has come with its own set of contradictions. Absolute poverty has declined, but inequality has been rising. While India’s unicorn club has been growing, manufacturing’s share in national income has stagnated, and the increasingly unproductive agricultural sector continues to employ more than two-fifths of all workers. Faster economic growth has not succeeded in raising the participation of women in the labour force from its abysmally low levels. Too many of India’s youth are unable to find jobs, and the promise of the demographic dividend is threatened by the widespread low levels of human capital.

This unit will offer a synoptic review of major issues pertinent to the evolving set of opportunities and challenges facing the Indian economy. In particular, the unit will focus on the following eleven topics or domains:

1. Economic growth

2. Demographic transition

3. Poverty and inequality

4. Agricultural sector and food security

5. Non-farm economy: industry and services sectors

6. Social sectors and human development: education and health

7. Employment and the labour market

8. Fiscal and monetary policy

9. Trade, trade policy and globalization

10. Environment and climate change

11. Gender equality

For each topic, the emphasis will be on developing a critical understanding of key contemporary issues and policy challenges, though informed by knowledge of the salient trends from a historical perspective. The overall aim of the unit is to make you adequately literate on the contemporary Indian economy.