In good old days, India was one of the richest nations of the world.
It is said that India was world’s largest economy until seventeenth century AD.
Just to explain how wealthy was ancient India, I will share some numbers.
In year 1600, India was ruled by a Mughal ruler Akbar.
It is said that Akbar maintained treasure worth $17.5 million.
Compare this with treasure of complete Great Britain in year 1800.
By year 1800, Great Britain amassed only $16 million. In year 1600 AD India’s GDP was equivalent to 21% of world’s economy.
Compare this with today’s USA, which has 16.14% share of world’s GDP.
But all those wealth was lost due to annexation by foreign superpowers.
It will not be wrong to state that Britishers dragged India’s ‘Golden Age’ back to stone age.
In 1947 when India got independence from British Empire its economy was in tatters.
It had virtually no roads and everywhere there was poverty, poor health, and people were not literate.
In last 68 years since Independence, India has matured.
People are again talking about India as the next economic superpower.
It has taken a lot hard work from both Indian government & business community to bring India back to track.
It will still take lot of hard work to return to levels of year 1600.
India is on its way to gaining the lost glory.
The progress is good and it will not be too far in future when our children will witness a second phase of India’s Golden Age.
India adopted globalization in 1991 after which foreign investment in India started growing faster.
But still India was considered as more restricted economy as compared to other developing nations like Brazil, China etc.
One of the main reason why India is not so desperte to remove the restrictions is because of its self reliance.
India has capacity to produce and self-consume its products and services.
But of course this way the GDP growth will not be as fast.
If India has to reincarnate itself again to the next economic superpower, it must be prepared to take more risks.
Globalisation and allowing high FDI is one such step forward.
After Independence in 1947, Indian economy was so bad that the biggest business sector in those times was Agriculture.
Back then it constituted for 52% of total GDP. Even in 2014-15, agriculture sector provides employment to more than 50% of India’s population.
Today GDP share of Agriculture is close to 17%.
India is largely an agricultural based economy. This is something like inherent talent of India.
India must try to utilize their agricultural know-how to gain bigger market share in world’s agricultural trade.
Presently India has just over 2% share of world’s agricultural trade.
Considering introduction of new technology and new brains in this sector, it has phenomenal growth prospects.
Indian industrial sector has the next biggest share in GDP.
It currently gives employment to ~20% of India’s population and has 24% share of GDP.
Manufacturing sector is the biggest industry in India. It contributes more than 17% to GDP.
But considering the potential, the performance is still far away from what it should be.
There is a lot of hope with “Make in India” policy of Indian government.
If this policy clicks, manufacturing sector will see three fold growth in next decade.
Presently the heart of India’s growth strory is in its services sector.
It contributes more than 50% to India’s GDP.
Services sector consists of industries like:
- Real estate etc.
Presently this sector employs ~30% of India’s population.
Its impossible to ignore India in 21st century.
Compare India with other developing countries like Brazil, China, South Africa & Russia.
Investors find India more conducive for variety of reasons.
One big factor is India being an English speaking country.
Fundamentals of Indian economy is also very robust.
India is a country with huge reserves of domestic savings.
Indian middle class is increasing substantially and contributing heavily to the GDP.
India is one of the youngest nation in the world with average age expected to be 29 years by 2020.
India needs to improve on its education base, check inflation and keep currency valuation in control.
India also needs to give special attention to the rampant corruption.
India is working on improving its infrastructure by building more airports, roads, metros, etc.
India is moving on right path.
A little pat on the back by world heavyweights, and India is set to become the next Mr. Responsible of the world.