Economy of India.

Revised for this edition by R. Nagaraj

Previously revised by Gareth Price

According to the national census of 2011, India was populated by more than 1,210m. people and had a population density of 382 persons per sq km. With the second largest population in the world (after the People’s Republic of China) and the seventh largest land area, India is notable for its considerable regional, economic and social diversity. Consequently, any average statistic for India conceals both this diversity and the disparity in levels of development. Regionally, India extends from the subtropical deltaic regions of the east and the south, to the semi-arid plains and plateaux of central India; from the areas of heavy, seasonal monsoon rains to the desert lands of Rajasthan. There are, on the one hand, relatively prosperous states, such as Gujarat, Maharashtra, Haryana and Punjab, where the levels of income per caput are much higher than the national average, and a number of states in the south, such as Andhra Pradesh, Karnataka and Tamil Nadu, where in the 1990s incomes started growing rapidly. (The southern states are also growing faster in terms of net State Domestic Product than the northern states of Haryana, and especially Punjab.) On the other hand, there are underdeveloped, poverty-ridden states, such as Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand and parts of eastern and north-eastern India, where the standard of living is abysmal. To sum up, wide inter-regional inequalities in almost all indicators of development are an important defining feature of the Indian subcontinent.

A significant feature of India’s growth between 2003 and 2011 (with the exception of 2008) has been almost consistent growth in gross domestic product (GDP) of over 8.0%. According to government estimates, growth moderated significantly to 6.2% in the 2011/12 fiscal year (April–March) and slowed further in 2012/13, to an estimated 5%, compared with 8.4% in 2010/11. Growth was not projected to return...