India's Economic Growth

India is the World's largest democracy and has a staggering population of 1.1 billion, second only to China.

India has some 467 million workers who are divided into three main sectors:

Agriculture 52%
Manufacturing 14%
Service Sector 34%

India's current GDP is $3,548 trillion. The average wage for a worker is $3,100.

Inflation is at 9.8%. Unemployment is 9.5%.

However some 25% of people still live below the poverty line.

The main reasons given for the increase in India's economy of late is the amount of Foreign Investment. The service sector has expanded rapidly in the form of investment banks and the well documented relocation of many Western call centres.

How sustainable these markets are is open to debate, as China or another global workhorse could tempt many of these investors away from India.

However when looking more carefully at India's financial sector boom, Foreign capital accounts for only 5%! 70% of the money sitting in Indian banks comes from households and consumers. But again the long term effect could be disasterous. The Government-owned banks have not always invested wisely.

Life insurance, pensions and normal bank deposit savings are not giving the returns expected to keep financing health care, old folk care, and schools.

So if we look at India from an Educational point of view, it is really a tale of Private sector vs Public sector and how when it comes to Finance and investment, basing an economy on that sector is high risk. If shares and savings crash what are you left with?

Perhaps India has moved too quickly from agriculture (Primary Sector) to services (Tertiary sector) and not invested enough in manufacturing (Secondary sector).

India has not followed China, Japan or Korea in becoming a world name for manufacturing cars or electronics for example. Perhaps India's 21st Century will be characterised by new brand names emerging from Mumbai or Kolkata as global players.