India is among the most populous countries in the world with an estimated population of close to 1.2 billion people. Over the last two decades, India has been able to achieve a sustainable growth of GDP leading to an increase in per capita income. The per capita income of India is $1,270 placing the country among the middle income economies. Despite an attempt to become one of the open economies, exports of goods and services from India still account for only 15℅ of GDP. However, this is estimated to rise in the next couple of years with the government putting in a number of economic changes by using UAN Login at epfindia.gov.in.
India's Development Path
Most developing countries all over the world are focusing on Agriculture as the main backbone of their economy. However, India decided to follow a different path by focusing on services which are less tightly regulated than heavy industries. This has led to a class of manufacturing giants in the Indian economy and society which help in supporting the development growth rate. Some of the supply-side factors which play a key role in India's growth and development include:
Increase in Working Age Population
India is currently undergoing a demographic transition which has played a key role in increasing the share of the working age population. At the moment, there are close to 700 million people who are below 35 years of age. With this population, the country enjoys a good growth rate since most of them are now working with different sectors thus contributing to economic growth.
Strong Legal System
The Indian government has put in place a strong Legal System which is the reason as to why many companies are now considering inward investments in India.
Low Wage Costs
Low wage cost is essential for the development of any country. It is for this reason that the Indian government has made amends in recent years to close down productivity gap with other developing nations. This in turn helps in economic growth and development.
India's economy is developing at a very fast rate thanks to technological spaces that have made the country a global software business centre. This action has greatly reduced the external economies of scale thus deepening India's competitive advantage.
Factors that Limit India's Growth and Development
Despite the fact that India is among the few nations with a high economic growth and development, there are still some factors that tend to slow down this process. Some of these factors are given below.
Poor infrastructure most notably in the transport sector and power networks is slowing down India’s economic growth rate. Fortunately, the government is putting in more effort to solve this problem.
India has a slightly closed economy since the country mainly imports primary products.
Reduced national savings which leads to a slow share of capita investment.
High inflation rate.
India needs to invest in manufacturing, infrastructure and agriculture in order to ensure effective growth rates. The good news is that there are measures which are now put in place by the government to make this a success.
Published by Joe Pirest