Summary |
The Indian economy has experienced significant changes in the two decades of the reform period which started in 1991. In the post-reform period, India has done well according to some indicators such as economic growth, exports, balance of payments, significant accumulation of foreign exchange, resilience to external shocks, service sector growth, revolution in IT sector, stock market boom, and so on. Thus, one broad conclusion is that the economic reforms have contributed greatly to macroeconomic stability and growth. GDP growth was around 8 to 9 per cent per annum in the period 2004-5 to 2007-8. India is a 1.6 trillion dollar economy, investment and savings rates have been quite high in recent years at 32 to 36 per cent. In spite of the global financial crises, India’s GDP growth rate has not declined significantly. Having witnessed a slowdown in growth in the wake of the crises, India’s growth rate picked up to 8 per cent in 2009-10 from 6.7 per cent a year ago. The economy expanded by 8.9 per cent in the first half of the current fiscal year (2010-11), making it one of the fastest growing economies in the world. GDP growth rate is expected to reach more than 8.5 per cent in the next financial year (2011-12) despite the uncertain global scenario. In the last two decades, India has also managed the inflation rate within limits although the problem of rise in food prices has been a worry in recent years.
However, despite high growth, there have been concerns on low agriculture growth, low-quality employment growth, low human development, rural-urban divides, gender and social inequalities, and regional disparities. Rightly, the government has emphasized on the need for inclusive growth during the eleventh plan period and beyond. It is, however, yet to be seen whether the country has moved towards achieving inclusive growth.
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