Covering Important Geographical and Economical Facts about India - Case Study Example

India India is located in South Asia toward north of the equator. By size, India is world’s 7th largest country with the area spanning over 3,166,414square kilometers with a coastline of 7,000 kilometers (Briney). India is bounded on the southwest by the Arabian Sea, and on the south and southeast by the Laccadive Sea. Countries in the neighborhood of India include Pakistan, China, Bhutan, Bangladesh, Indonesia, Burma, and Thailand. New Delhi is the capital of India. Major cities in the country include but are not limited to Mumbai, Chennai, Kolkata, Bangalore, and Lucknow. Rajasthan is the largest of the 28 states of India. In the north, India has a great range of mountains including Patkai, Hindu Kush, and Himalayas. Since some of the tallest mountains in the world are located in this mountain range, they serve as a barrier to the cold polar winds. The highest peak of India is called as Kanchenjunga and its height is around 8,598 meters (Briney). Geographically, there are the different geographic regions in India; toward the north is the Himalayan region, the plateau region is in the center, and the Gangetic Plain is in the south. India has three great systems of river including the Brahmaputra, the Ganges, and the Indus. All these river systems rise in the Himalayas and consist of extensive deltas. With the population of 1,255,720,200, India ranks the 2nd largest country in the world with respect to population as per the statistical record of 2014 (“India Population 2014”). Although the rate of growth of population has decreased a lot in the recent years as a result of important measures taken and interventions made by the government, yet the population of India is still growing faster in comparison to China. While China is more populated than India today, the population of India is expected to become more than that of China till 2028, with the estimated population being 1.45 billion. The largest city of India is Mumbai followed by Delhi. Their population is 12.5 million and 11 million respectively. People in the Indian society are divided into different classes on the basis of financial status, religion, caste, custom, and creed. From color to features, the people of India show a great variation from one end of the country to the other. People belonging to different faiths dwell in India mostly in peace and harmony. While the country is predominantly Hindu, there are considerable populations of people following other religions including Islam, Sikhism, and Buddhism. Over 80 per cent of the people in India are Hindus, Muslims being 130 million in number make the second largest population in India whereas the population of Christians and Sikhs is estimated to be 25 million and 15 million respectively (“Indian religions”). The people of India are very hard-working. In a vast majority of families, both men and women work. According to UNICEF, nearly 88% of all males and 74% of all females graduate from the educational system. Nearly 68% have mobile phones and 12% are Internet users. These statistics represent a percentage improvement since 2005 numbers. Higher level of education means more opportunity for everyone in the country. Life expectancy has increased from 48 years in 1970 to 66 in 2012 (“UNICEF: India”). This represents improvements in sanitation, nutrition, and access to health care. These are all indicators of a healthy economy and improved poverty rates over time. UNICEF still notes that sanitation is much improved in urban areas, as opposed to rural areas. The currency of India is Indian Rupee. In terms of economic freedom, India ranks 55.7 in the world because of which, the economy of India in the 2014 index is the 120th freest (“2014 index”). Indias score of economic freedom has advanced in the history of the last two decades by almost 11 points (“2014 index”). While India is mostly rated as unfree economy, its economic score in the 2014 index was the highest ever. Chances of long-term economic development of India are undermined by institutional shortcomings. There is extensive presence of the government in the economy of India thruster wasteful subsidy programs and state-owned enterprises which cause high budget deficits chronically. Administrative bureaucracy has burdened the overall regulatory environment in the country. Modernization and development of the economic base is hampered by burdensome investment regulations and non-tariff barriers. The top individual rate of tax in India is 30.9 percent that comprises an additional levy of 3 percent for education (“2014 index”). While the domestic corporations pay no more than 30 percent tax rate, the top corporate rate of tax in India is 32.4 percent (“2014 index”). In addition to that, the value-added tax also has to be paid. Overall burden of tax on India is 7 percent of the GDP (“2014 index”). Expenditures of the government make 27 percent of the gross domestic output whereas 67 percent of the GDP is public debt (“2014 index”). According to the World Bank, the gross domestic product for India, expressed as a percentage of the previous year’s growth represent a healthy peak in 2010, but a decline over the last two years. In 2009, the GDP growth was 8.5%. This increased to 10.3% in 2010 (“GDP Growth”). In 2011, GDP growth experienced a 6.8 % growth, dropping to 4.7 in 2012. This is still a healthy growth rate for a country that used to be considered a third world country, but that is emerging from its previous condition. Published by the World Bank, the GINI coefficient is a globally accepted income inequality measure. The higher the number of GINI coefficient, the wider the gap between the rich and the poor in a country. Indian society is based on extremes with respect to socioeconomic conditions. On one hand, there are elite who are counted among some of the wealthiest people in the world. On the other hand, poverty in India is omnipresent. “Income inequality in India is glaring. It stares you in the face in Mumbai: the gated communities on the one hand and the slums on the other; the designer weddings for which hundreds of guests are taken abroad. I recall Dilip Bobb writing in The Financial Express some time back about the Diwali card parties in Delhi in which the opening bids are Rs.5-10 lakh and sometimes BMWs change hands” (Rajwade). Traditionally, improvements in infrastructure result in a lowering of poverty rates and a reduction of income inequality. India has invested heavily in the infrastructure of the country, allowing it to become a major world competitor the business and manufacturing sector. (Majumder) argues that while infrastructure improvements have resulted in an overall reduction of poverty when one considers the nation as a whole, it has increased the income inequality between urban areas and areas that lack these infrastructure improvements. While Majumder’s argument is true and the income divide between those in urban areas and rural areas has increased, improvements in the urban areas have allowed India to increase production and economic growth. More than 70 per cent of the 22 million people living in Mumbai live in slums (“The Need: Poverty”). They have limited access to food, clean water, education, and electricity. The overcrowded facilities of communal bathroom in the slums together with open sewage system contaminate the scanty sources of clean water in India. More than seven million children below 14 years of age living in these slums live in abject poverty (“The Need: Poverty”). Children are forced into working at a very early age under the burden of their families. They take on menial tasks including rag picking and sewage cleaning. Education is more of a luxury than a basic necessity in many communities in India. Rate of unemployment has varied in India over the past decades. In 2014, rate of unemployment in India has increased because of a range of factors including slower expansion of business activities and economic slowdown. The unemployment rate in the start of the year 2014 was found to be 3.8 per cent (“Unemployment levels rising”). The GDP per capita of India from 2009 to 2013 has been recorded to be 5,410 (“GDP per capita”). India is an active player in the global trade. With its fertile land, India is a major exporter of wheat, rice, and other eatables. The Indo-Gangetic belt in India is the most extensive range of river-made uninterrupted alluvium in the world, which is a reason for the abundance of ground water sources in the country. These lands are best-suited for cultivation of main crops like rice and wheat that remain high in demand both within and outside India. Sugarcane and cotton are also grown in abundance in the region. India is home to the 7th largest desert in the world; the Thar desert that spans over an area of 230,000 square kilometers. The area of inland waterways in India is nearly 14,000 square kilometers consisting of 12 major rivers. During heavy rainfall, main rivers in the southwest cause flood. On the other hand, plenty of water collected provides the farmers with a reliable source of water for fertilization of crops and irrigation. The fact that many people lose their lives in the event of occurrence of flood can be attributed to poor disaster management system in the country. Refined petroleum, jewelry, packaged medicaments, iron ore, and cars are the major exports of India. This provides evidence of the abundance of natural resources in India. Crude petroleum, gold, coal briquettes, diamonds, and petroleum gas are the major imports of India. Inflation in India generally refers to inflation rate based on consumer price index (CPI). CPI per year consistently increased from May 2005 to May 2010 in India with the peak value of 13.907 % reached in May 2010 after which, CPI per year shows a fluctuating pattern from year to year (“Inflation India”). India’s production and economy continues to grow over the long term at a slow, but steady pace. India used to be known as an impoverished country that lacked the infrastructure and skills needed to rise from its developing nation status. The country has managed to stockpile rice, wheat, and sugar over the past few years to curb inflation, but fruits and vegetables seem to have the biggest impact on inflation (Singh). Seasonal heavy rains can impact the production of commodities on a temporary basis. In spite of the huge poverty in India, the purchasing power of the people of India is paradoxically increasing. This can primarily be attributed to dependence on the local natural resources and reduced reliance on external factors; “...in India more and more people are incorporating themselves to higher levels of purchasing power. That is increasingly fuelling the growth of India rather than exclusively relying on external factors. It is a more balanced structure” (Gurria cited in “Rising purchasing power”). India is considered to be the next rising star for economic opportunity. India is the largest democratic government in the world. Since 1991, they have had a policy of trade liberalization that has made India one of the more promising opportunities for foreign direct investment (“Business Opportunities in”). Trade Chakra also reports that India has an expanding middle class with greater purchasing power than ever before. Indians are becoming brand conscious, rather than a purely discount market. India is exposed to a range of opportunities and challenges economically, socially, and politically. India is a rising star in the world for many reasons. India has many strengths. One of them is demographics. They have a healthy birthrate, which means that their workforce can continue to grow for many years in the future (Pettinger). As these new workers enter the economy, they will become consumers. They are also positioned to fill in gaps in the economies of other nations through outsourcing (Pettinger). New economic growth resulting from improvements in the urban areas will allow India to continue to improve its infrastructure, eventually spreading to even the most remote rural areas. This will take time, but progress is being made. As the infrastructure continues to improve in urban areas, the income divide between these areas will improve as well. On the other hand, India’s greatest challenge still remains to be providing infrastructure to its rural areas. Despite the impressive economic growth over the last half century, only about 40% of the households in rural areas have access to the power grid (“Bangladesh: Lighting Up”). Bangladesh remains one of the most impoverished areas of the world. The status of India’s poorest of poor hinders its climb into status as a fully industrialized nation. Resolving the issue of poverty in rural areas will provide an even greater boost to the economy. A majority of India’s population is spread overs its vast landscape. Those in the city have access to all of the conveniences of the global economy. Yet, those in rural areas lack many of their basic needs. ? Improving opportunities for growth in rural areas provides many opportunities for both domestic and foreign investment. India currently has an initiative underway that targets the most poverty stricken areas of the country. It is providing them solar power systems for their homes. In many of these areas, despite the nation’s best efforts, the power grid will still take years to reach these areas (“Bangladesh: Lighting Up”). This initiative will provide them with power until the grid can reach them. These improvements will make help to improve India’s economy reach even greater heights in the future. India has a vision of achieving 100% access to electricity by the year 2020 (“Bangladesh: Lighting Up”). Access to electricity in Bangladesh, by either solar power or connection to the grid, has increased at a rate of 3.5% since 2009, according to World Bank figures.  The political state of affairs in India is a key weakness. Their government is a highly bureaucratic system that is known for corruption. This corruption has created a lack of capital to continue to build the infrastructure (Sitapati). For many years the Congress Party has led India. They failed to reinvest money in the infrastructure, keeping the windfall for themselves. Recently, the India populace punished them in the elections. The Indian populace wants to see less corruption and funds invested in a way that will grow the economy, not the pockets of several individuals (Sitapati). India has a vision that includes continued growth in the future. They understand the challenges they face in closing the economic gap between the urban and rural areas. They also understand that they must continue to spend more money on improving the infrastructure in rural areas if they wish to continue to experience steady growth. Many are concerned that India’s economy has begun to experience a downturn since 2010 levels, but this is just a settling of the economy to more sustainable growth rates. India represents newcomer to the global economy, but they have proven that they are here to stay and that the world can expect to see many new opportunities from them in the future. India has improved the health of its people and the health of the economy has improved along with it. India still has a way to go, but it has vision and drive. There is no doubt that India will continue to offer growing opportunities for many different business sectors. Works Cited: “2014 index of India.” 2014. Web. 2 July 2014. . “Bangladesh: Lighting Up Rural Communities.” The World Bank. 15 April 2013. Web. 29 June 2014. . Briney, Amanda. “Geography and History of India.” 2 June 2014. Web. 2 July 2014. . “Business Opportunities in India.” Trade Chakra. 2008. Web. 29 June 2014. . “GDP per capita, PPP (current international $).” The World Bank. 2014. Web. 3 July 2014. . “India Population 2014.” 2014. Web. 2 July 2014. . “Indian religions.” N.d. Web. 2 July 2014. . “Inflation India - consumer price index (CPI).” 2014. Web. 3 July 2014. . Majumder, Rajarshi. “Removing poverty and inequality in India: the role of infrastructure.” Munich Personal RePEc Archive. 2012. Web. 29 June 2014. . Rajwade, A. V. “GINI coefficient and India.” Live Mint & The Wall Street Journal. 16 Jan. 2014. Web. 2 July 2014. . “Rising purchasing power drives Indias economic growth: OECD.” The Economic Times. 16 Oct. 2012. Web. 2 July 2014. . Singh, Rajesh. “India’s economic outlook turns encouraging for new government.” 12 June 2014. Web. 29 June 2014. . Sitapati, Vinay. “Dravidian majors take election joyride on UPA’s flagship.” 24 April 2014. Web. 3 July 2014. . Pettinger, Tejvan R. “Strengths of Indian Economy.” N.d. Web. 3 July 2014. . “The Need: Poverty in India.” 2014. Web. 2 July 2014. . “Unemployment levels rising in India, experts say.” The Times of India. 26 Jan. 2014. Web. 3 July 2014. . “UNICEF: India Statistics”. 2012. Web. 29 June 2014. “GDP Growth (Annual %).” The World Bank. 2014. Web. 29 June 2014. . Read More