India is the world’s fourth-largest economy. It produced $9.4 trillion in goods and services in 2017. But it has a long way to go to beat the top three: China, with a production worth $23.2 trillion, the European Union with $20.9 trillion, and the United States with $19.4 trillion.
India had rapid growth despite the Great Recession of 2008. It grew 6.8% in 2018, 7.2% in 2017, and 8.2% in 2016. From 2008 through 2014, it grew between 3% and 8.5%. That phenomenal growth rate reduced poverty by nearly 10% in the 2010s. Modi, a successful businessman, promised to reduce bureaucracy and regulation, greenlight infrastructure projects, and simplify the tax code, he won the election twice, once in 2014 and other in 2019, ending the 30 yrs of coalition government.
Although growth rates were greater than 6% between 2014 and 2017, unemployment is over 7%. The government-owned banks had bad debt that reduced their ability to lend. The rupee declined through 2016, allowing 3.6% inflation. A goods and services tax was unpopular. Since the 1990s, India has deregulated several industries. It’s privatized many state-owned enterprises, and opened doors to foreign direct investment. One-third of its workers are employed by the services industry, which contributes two-thirds of India’s output. The productivity of this segment is made possible by India’s shift toward a market economy. And that’s where we are stuck today, yes, again the covid days and the bad memories of the two waves reignites, which possibly can bring yet, another wave, and then the service sector which is already devastated will own us its last breath.