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Economy India

Economy - overview:
India's diverse economy encompasses traditional village farming,
modern agriculture, handicrafts, a wide range of modern industries,
and a multitude of services. Services are the major source of
economic growth, accounting for more than half of India's output
with less than one quarter of its labor force. About three-fifths of
the work force is in agriculture, leading the UPA government to
articulate an economic reform program that includes developing basic
infrastructure to improve the lives of the rural poor and boost
economic performance. The government has reduced controls on foreign
trade and investment. Tariffs averaged 12.5% on non-agricultural
items in 2006. Higher limits on foreign direct investment were
permitted in a few key sectors, such as telecommunications. However,
tariff spikes in sensitive categories, including agriculture, and
incremental progress on economic reforms still hinder foreign access
to India's vast and growing market. Privatization of
government-owned industries remained stalled in 2006, and continues
to generate political debate; populist pressure from within the UPA
government and from its Left Front allies continues to restrain
needed initiatives. The economy has posted an average growth rate of
more than 7% in the decade since 1996, reducing poverty by about 10
percentage points. India achieved 8.5% GDP growth in 2006,
significantly expanding manufacturing. India is capitalizing on its
large numbers of well-educated people skilled in the English
language to become a major exporter of software services and
software workers. Economic expansion has helped New Delhi continue
to make progress in reducing its federal fiscal deficit. However,
strong growth - more than 8 percent growth in each of the last three
years - combined with easy consumer credit and a real estate boom is
fueling inflation concerns. The huge and growing population is the
fundamental social, economic, and environmental problem.

GDP (purchasing power parity):
$4.042 trillion (2006 est.)

GDP (official exchange rate):
$796.1 billion (2006 est.)

GDP - real growth rate:
8.5% (2006 est.)

GDP - per capita (PPP):
$3,700 (2006 est.)

GDP - composition by sector:
agriculture: 19.9%
industry: 19.3%
services: 60.7% (2005 est.)

Labor force:
509.3 million (2006 est.)

Labor force - by occupatio