Challenges to the economy
Widespread poverty and unemployment are two of the major concerns yet to be fully eradicated. The country’s ceaselessly growing population has been a hindrance in breaking the vicious cycle. Additionally, as opposed to its “developed” counterparts that are service-based, India is primarily an agriculture-based economy and is still transitioning towards becoming more service-oriented. Although it is the services sector that contributes largely to the country’s GDP, most of the workforce is employed within the agriculture sector. Over the years, various government-led initiatives such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Garib Kalyan Yojana (PMGKY) have been implemented to help uplift households in rural India, where those living below the poverty line were mostly concentrated. Skilling and capacity-building programs operated by the central and state governments focus on improving the employability of the country’s workforce. However, while government expenditure on education and health developed a growing trend, it still accounted for a relatively small portion of the GDP.Impact on trade and investment
In terms of industrial production, some of India’s leading sectors were the automotive, cement, and steel industries. Apart from the pandemic, factors such as the inflation rate and disrupted supply chain resulted in a deceleration in growth of the overall manufacturing sector. On the other hand, the chasm between India’s import and export trade continued to widen as the rapidly growing economy imported larger volumes of raw materials, chiefly petroleum and its products, gold, and chemicals.As one of the largest unicorn bases globally, India is also a major repository of foreign and domestic investment. While not all startups go on to become unicorns, India has a fair share of micro and small scaled enterprises. Moreover, the Indian market is home to leading conglomerates such as Reliance Industries Limited and the Tata Group that are vested in several important economic sectors. Schemes such as Make in India and Startup India were initiated to bolster the ease of doing business for the growing number of business enterprises in the country.
