India's Economy

Microeconomics - India

India’s Growth

With the rest of the world economy hoping to get out of the economic downturn, India is quite satisfied with how well they have done in the current economic catastrophe. Regardless of an unprecedented global recession, India still remains the second fastest growing economy in the world. Whereas most countries suffered negative growth in at least one quarter over the last two to four years, India’s GDP grew by more than 6% throughout this period. The graph1 above shows that India’s GDP has tripled since 2000. The steady incline can be seen in this graph as well. In recent years, India's economy is mostly dependent on its large internal market with external trade accounting for 20% of the country's GDP.

Nevertheless, throughout the recession, India was fortunate in escaping a potentially more severe impact from the crisis. A powerful series of counter-measures by the major economies arrested the financial panic, and allowed for a quick recovery of global demand. India may not have been as elastic if global financial markets and global demand did not steadied so quickly in response. India also benefited from domestic policies that had luckily been put in place well before the economic crisis. It is very rare that India was not affected like other countries in the global downturn. Many books have been published to reveal the secret of India’s economy, most restating the same facts.

November 26, 2008 and the Economy

This explosive economic growth is very surprising seeing the November 26, 2008 attacks on Mumbai, which is known as the commercial capital of the country. (Some might argue that the November 26 attacks in India were in a way similar to the September 11 attacks which occurred in the United States.) The attacks bought about a negative image of India as a growing economy, a globalized country, and a shooed foreign investors as well as tourists. The heavy foreign investments per-attacked were seen to have a...