Introduction:
India is one of the fastest growing economies in the world. It has experienced a tremendous growth rate since 2013 and is expected to continue its growth trajectory in 2023 as well. In this article, we will compare the economic conditions of India from 2013 to 2023, looking at key economic indicators such as GDP, inflation, employment, and more. We will also provide insight into the economic policies being implemented by the government to ensure continued economic growth.
GDP:
In 2013, India’s GDP was estimated to be around $1.86 trillion, ranking it 10th in the world. The GDP per capita was estimated to be around $1,579. By 2023, it is estimated that India’s GDP will reach around $3.3 trillion and the per capita income will reach around $2,687. This means that India’s economy will have almost doubled in size since 2013. This growth is due to an increase in investment from both foreign and domestic sources as well as increased productivity from India’s workforce. Additionally, reform measures undertaken by the government have also helped drive India’s economic growth.
Inflation:
In 2013, the inflation rate in India was around 6.7%. However, by 2023, it is estimated that the rate of inflation in India will drop to around 4.5-5%. This decline in inflation rate is attributed to the government’s effective monetary policy and efforts taken to control the supply of certain goods. Additionally, economic liberalization reforms, such as opening up more investment avenues, have also played a role in reducing inflation.
Employment:
In 2013, the unemployment rate in India stood at 8.9%. This rate rose to 9.6% in 2017 before dropping again to 7.7% in 2020. The employment rate is expected to continue to improve, with estimates predicting it to drop further to around 6.5-7% in 2023. This improvement is partially due to increased labor force participation, specifically from women and rural citizens. Other factors contributing to the increase in employment include improved education levels, technological advancements, and greater access to finance for small businesses.
Growth Sectors:
In 2013, the major growth sectors for India were agriculture, manufacturing, and services. These three sectors accounted for over 75% of the GDP at the time. Since then, the IT, BPO, and startup sectors have seen tremendous growth.
In the last decade, the Indian economy has seen an unprecedented growth. It has experienced a reversing of fortune from an agrarian, suburban-dependent economy to a globally-competitive, innovative and technology-driven economy. In 2013, this long-term development trajectory was already taking shape when the Modi government came in to power. With a focus on a sustainable, inclusive and equitable growth of the economy, the government has put into place a comprehensive set of structural reforms, policy initiatives and technological interventions whose collective impact has laid the foundation for a strong and prosperous future. This article compares the 2013-2023 sectoral growth trajectory of the Indian economy across key sectors to assess the dynamic developments in the country over the last ten years.
Agriculture
Agriculture is a major contributor to the GDP and employs over 58% of India’s population. In 2013, agriculture consisted of small and marginal farms of less than two hectares, cultivation of hybrid varieties – particularly in the northern states, as well as traditional practices like organic farming, livestock rearing and natural farming. Since then, the agricultural sector has seen a major shift towards larger-scale mechanized and automated farming. The government’s reforms in this sector have included the implementation of the Pradhan Mantri Krishi Sinchai Yojana, with an aim to increase agricultural production and efficient water management, as well as the introduction of the Pradhan Mantri Fasal Bima Yojana, to promote insurance and risk cover for farmers. The government has also streamlined agricultural markets and warehouses, eased the availability of credit and improved infrastructure and road network access to rural areas. The result is that, in 2020, agricultural output had grown by a staggering 2.1% and the sector has become the largest contributor to India’s GDP.
Industry
The industrial sector was already expanding at a healthy pace in 2013. Fuelled by manufacturing hubs such as the National Investment and Manufacturing Zone, Special Economic Zones and Industrial Corridors, investments in infrastructure development flooded in, paving the way for the shift in industrial production from resource-heavy production to more capital-intensive processes and higher value-add services. Technical innovations in the fields of artificial intelligence, robotics and automation have also enabled Indian industry to become even more competitive in the global market. As a result, the industrial sector has grown by 7% over the last decade, with the Index of Industrial Production reaching an all-time high in 2017-18.
Services
The services sector has always been an important part of the Indian economy, and 2013 saw the sector account for almost 55% of the country’s GDP. In the following years, investments in e-commerce, communication infrastructure and startups have propelled this sector to new heights. Digital payments have become so commonplace that most businesses are now digitalized. The e-commerce industry already stands at a value of almost $50 billion, with potential to rise significantly in the coming years. The digital revolution has also been accompanied by a shift in the focus of new jobs, with more people entering the services sector. This has resulted in the sector’s growth rate increasing to 8.3% over the past decade.
Financial services
The financial services sector has emerged as a major contributor to the country’s GDP and accounts for almost 8% of the overall GDP. Development in this sector has been tremendous, with NPA levels falling by 1,80,000 crore in the last few years, and almost 41.83 crore bank accounts being opened under the ‘Pradhan Mantri Jan Dhan Yojna’. The initiative to launch a unified Payment System, which includes UPI, IMPS and RuPay, has revolutionized the way payments are made. A number of fintech products such as the Unified Payments Interface, the Real Time Gross Settlement System, and mobile wallets have also been introduced over the past few years. The advances in technology have resulted in almost 45.23 million POS terminals being installed in the country, and an increase in the number of digital transactions to 33.5 crore in 2018-19.
Infrastructure
The inadequacy of infrastructure was one of the major issues that the Indian economy faced in 2013. With an aim to accelerate the pace of infrastructure development, the government has launched several flagship public-sector programs such as the National Infrastructure Investment Fund, the Smart Cities Mission and the Sagarmala project. It has also approved a number of private-sector initiatives such as the construction of new expressways, ports and power projects. The total investments in the infrastructure sector have grown exponentially from ₹4.82 lakh crores in FY19 to ₹10.75 lakh crores in FY20. This has not only enabled India to reduce travel time and create jobs, but it has also helped lower the overall cost of production by eliminating transportation costs and improving the availability of resources.
Telecommunication
The communication sector has also undergone dramatic changes since 2013. The shift to a unified design of communication networks enabled the launch of Fourth-Generation (4G) services, which drastically improved network speeds, allowing for a more connected India. The number of mobile subscribers has seen a three-fold increase, from 900 million users in 2013 to about 2.6 billion users in 2020. Further, the launch of the ‘Digital India’ initiative in 2015 revolutionized the country by making broadband services easily affordable and incenting digital literacy amongst its citizens. From less than 5 Mbps of average internet speeds in 2013, the country now has speeds of up to 40 Mbps.
Energy
The energy sector was previously marred by intermittent supply, low access and low use efficiency of resources. This has been reversed in the last few years with the introduction of long-term measures such as the Smart Grid Models, the Pradhan Mantri Sahaj Bijli Har Ghar Yojana and the Sahaj Bijli Har Ghar Aadhar Scheme. The distribution of electricity through the Smart Meters has improved the convenience and affordability of electricity, while the intensified focus on renewable energy sources in the past few years has seen a decrease in the finance cost associated with diesel, gas and coal-based electrical plants. As a result, India is now the third-largest electricity producer in the world after China and the United States.
Conclusion
Over the last decade, the Indian economy has undergone a remarkable transformation across all the major sectors – from the agricultural to the service sector. Although the evidence points towards impressive growth trajectories across different sectors, the country still has a long way to go in terms of developing its full potential and in reaping the demographic dividend. In order to achieve the sustainable and inclusive growth of the economy, it is essential that the government continues to focus on making the required and necessary reforms, investments in innovation and improvements in infrastructure, and the implementation of policies that promote and enable digital transformation.
(Author can be reached at email address casharma.sharad2000@gmail.com or on Mobile No. 9990365673)
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