India - Economy overview
- India is the fifth largest economy in the world on the basis of nominal GDP, according to The World Bank GDP ranking. The Economic Survey 2021-22 predicts 9.2% growth in India’s real GDP in 2021-22, after contracting in 2020-21. The International Monetary Fund’s World Economic Outlook (April 2022) values India’s GDP at USD 3.53 thousand billion and GDP per capita at USD 2.52 thousand at current prices.
- According to the OEC (Observatory of Economic Complexity), India is ranked as the 18th largest exporter in the world with a total export value of USD 284 billion in 2020 and as the 12th trade destination with total imports at USD 372 billion.
- India ranks 63rd on the World Bank’s Ease of Doing Business index in 2020.
- India attracted the highest ever total FDI inflow of USD 83.57 billion during 2020-21. FDI inflows increased by 23% post COVID.
- India is Australia’s 5th largest trading partner with trade in goods and services at AUD 29 billion representing 3.6% of Australia’s total trade in 2017-18, with exports at AUD 8 billion and imports at AUD 21 billion.
Policies and initiatives
- The Government of India launched its Make in India initiative in 2014 to boost the country’s manufacturing sector and increase the purchasing power of the average Indian consumer, which would further drive demand and spur development and investment.
- The Digital India initiative launched in 2015 focuses on three core components: creating digital infrastructure, delivering services digitally and increasing digital literacy.
- Atmanirbhar Bharat Abhiyaan or Self-Reliant India campaign was launched in May 2020 to support India’s domestic economic activities. Following the first COVID-19 wave, the government announced a special economic and comprehensive relief package of INR 20 trillion (approximately USD 260 billion), representing 10% of India's GDP under this campaign. Further measures for relief and credit support for businesses, especially MSMEs, during the COVID-19 pandemic, were implemented in 2020. Several monetary and micro-financial policies were also announced in 2020 in response to the COVID pandemic.
- The Goods and Services Tax (GST), introduced on 1 July 2017 by the Government of India is a comprehensive, multistage, destination-based tax that has replaced a range of indirect taxes with a federated tax and is reshaping the country's economy.
- The Startup India initiative was launched on 16 January, 2016 to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
- A Smart Cities Mission was launched on 25 June, 2015 with an objective to drive economic growth and improve quality of life through comprehensive work on social, economic, physical and institutional pillars of a city. One hundred cities have been selected to be developed as Smart Cities through a two-stage competition.
- Skills India is an initiative launched in 2015 to train over 400 million Indians in different industry-related jobs with a vision to create an empowered workforce by 2022. Various schemes under this include PMKVY, PMKK, Apprenticeship Training, TITP.
- Pradhan Mantri Awas Yojana (PMAY) was an initiative launched in 2015 to provide affordable housing to the urban poor. It has two components: Pradhan Mantri Awas Yojana (Urban) (PMAY-U) for the urban poor and Pradhan Mantri Awaas Yojana (Gramin) (PMAY-G) for rural areas.
- Innovation for Defence Excellence (iDEX), launched in 2018, engages with industries including MSMEs, start-ups, individual innovators, R&D institutes and academia to provide grants/funding and other support to carry out R&D, which has potential future implications for the Indian defence and aerospace sectors.
- The Government of India revised and implemented a Consolidated Foreign Direct Investment Policy in October 2020 in order to supplement domestic capital, technology and skills for accelerated economic growth and development.
- Various initiatives such as the Production Linked Incentive (PLI) Scheme, Remission of Duties and Taxes on Exported Products (RoDTEP), improvement in logistics infrastructure and digital initiatives have been undertaken to promote and strengthen exports.
- In March 2021, the parliament passed the National Commission for Allied, Healthcare Professions Bill, 2021 to meet the sector's long-standing demands and increase professional employment opportunities.
The Ministry of Finance serves as the Indian Treasury Department with responsibility for the economy of India, including taxation, financial legislation, financial institutions, capital markets, centre and state finances, and the Union Budget. The Ministry of Finance is the apex controlling authority of the Indian Revenue Service, Indian Economic Service, Indian Cost Accounts Service and Indian Civil Accounts Service.
The Union Finance Ministry of India comprises five departments: Department of Economic Affairs, Department of Expenditure, Department of Revenue, Department of Financial Services and Department of Investment & Public Asset Management. The Department of Economic Affairs is the nodal agency of the Union Government to formulate and monitor India’s economic policies and programs having a bearing on domestic and international aspects of economic management.