The Economy of India
Introduction
A number of countries generate little income from international trade because of the nature of their exports. The imports of these countries exceed the exports sometimes, leading to very high figures in debt from the World Bank and the other developed countries in the west. The World Bank arrives at the figures used to classify countries by using the net income and gross income in relation to the populations of the same.
The world bank the uses these classifications to ascertain which countries are qualified to be given foreign aid or can be allowed to borrow. This is a necessary measure in order to drive countries not doing well economically from borrowing more leading to worsened situations and more debts. There are low income countries, mid income countries and high income countries. The main hindrance to economic trade in many underdeveloped countries is bad governance, scarcity of resources and political unrest. Some countries have everything working for them except that they have inefficient trade policies and fiscal principles.
India’s economy
Among the countries classified under the low income economies in the world is India. GDP (current us $) represents the total of the gross value added by every of the producers that reside within the borders of a certain country. Its value also includes all the taxes related to the products less the waivers and subsidies granted in the production of the said products (Scaglia2010). Subsidies and waivers are not necessarily included when calculating the actual cost of production of the products and are thence considered irrelevant as far as GDP is concerned.
Also, the GDP figures do not account for the values of depreciation or degradation of assets or the natural resources from which trade arises (Rupley, Bangali & Diamitani, 2013). This measure of economic status is usually quantified in terms of current United States $. In the year 2015 the GDP of India stood at 10.678 billion us dollars falling from the previous year’s total GDP of 12,257 billion dollars.
The population of a country is usually the total count of individuals residing in a given country regardless of whether they are there legally or illegally or whether they are citizens or not. The importance of studying a countries population is the definite impact of population changes on social amenities and infrastructure as well as the natural resources because a shift in population results in less or more competition for the limited resources (Scaglia, 2010).
There have been vast inaccuracies in the conductionofcensus data collection and repeated sampling proceduresby international bodies like the UN leading to unreliable recent census estimates for most developing countries. The UN sorts demographic information in five years data piles and arrives at the average figure (Rupley, Bangali & Diamitani, 2013). The figures are in accurate and once the predictions of population growth are made using the same erroneous figures, the credibility of the whole census postulation and accuracy is questionable. To counter this, the UN has in the past put up measures to review the statistics yearly in order to adjust the figures accordingly. The population of India in the year 2015 was estimated to be around 18, 105,570 and is assumed to be growing steadily.
The GDP per capita of a country is defined as the total national income earned by the nation divided by the population by the middle of the fiscal year under analysis. This is usually done using the United States dollars currency and is arrived at using a unique methodology commonly referred to as the World Bank atlas method (Scaglia, 2010). The value comprises of the figures obtained from the value added by the populations producers summed with taxes on the products from that country and the salary or compensation for the workers involved alongside fee for assets used (Rupley, Bangali & Diamitani201 3).
This value is very crucial to the World Bank because it determines whether a country is eligible to borrow from the bank or otherwise. TheGDPper capita of BurkinaFaso was estimated to be 640 $ with very unpredictable shifts. It is therefore difficult to ascertain the trend of the country’sGDP based on the records at the World Bank website.
The India government is keen in improving the net direct investment plan by foreign countries or the FDI programs.it has measures put in place to make sure that foreign investors in the country are well catered for legally. It even has a special tribunal dedicated to the investment disputes. This can be attributed to the ever growing gold mining industry that has attracted many foreign companies to invest there. Theseforeign investors come from countries like Canada and the United Kingdom (Scaglia2010).
They introduced tax incentives and exemptions for the foreign companies in order to encourage more investors. In 2014 however, the political turmoil surrounding president Blaise Compaore’s bid to run for a third presidency term slowed down foreign investment as prominent stores and investments were destroyed and looted. In the years to follow India would undergo a go slow in terms of FDI statistics and prospects. The outflow of di from the country was estimated as at 0.3% of the economy in the year 2015. This represents the intensity of investment by its government in other countries.
The balance of payments is basically the summation of the net exportation and current exchanges and is usually calculated in terms of us dollars. In the year 2014 this economic indicator stood at -997625, 572 current us $.the economy exports agricultural products as well as livestock and gold (Rupley, Bangali & Diamitani 2013).
The mainplant products exported include cotton ad sesame seed. The income generated from the export industry is estimated to have been around 2.734 billion $ in the year 2012. Its imports in the same year were estimated to be worth around 2.868 billion $ most of the imports included, capital goods, petrol and foodstuff.
A large portion of the citizens of India face unemployment due to the extreme scarcity of resources and many people end up migrating to its neighbours in order to get jobs (Scaglia2010). The money they send back home is quite substantial and serves to boost the economy that heavily relies on the export of cotton. The banking sector is also very proficient and handles more than 60% of the financial assets in the whole country. The unpredictability of the rainfall and climate has made the agricultural sector susceptible to dips and extensive loses hence making it less attractive to many.
