365 Days of Climate Awareness 303 – Economic Development of India

India’s economy is currently the sixth largest in the world, worth $3.04T, having industrialized very quickly since gaining its independence in 1950. Its annual growth rate of 5.8% since 2000 is one of the world’s highest. Three sectors dominate: service at 55.6% of GDP, industry at 26.3% and agriculture at 18.1%. In 2020 India ranked13th for global exports, at 2.34% of the world total.

India, GDP per capita, 1600-2018.

GDP change vs. previous year, 2017-2027 (projected).

India’s economic growth for the first three decades following independence from Britain featured moderate annual growth of 3%. This area is named alternately the “Hindu era” and the “Socialist era”, somewhat pejoratively for India’s modest economic growth relative to South Korea of the same time (~10% annual growth), not factoring in obvious realities like India’s more than twenty-times-larger population and disparate geography. Growth slowed dramatically between 1980-1995, and then, after a number of capitalistic reforms, began a twenty-year phase of growth hovering around 7%. The COVID pandemic depressed that growth but India’s economy has roared back in the aftermath.

GDP change by sector, 1950-2012.

                                                                                                                                                        

Industrialization Index (manufacturing value added vs. GDP), 1990-2018.

Through the past seven decades, India’s leading industries have been iron and steel production, textiles, jute, sugar, cement, and paper manufacturing. More recently, pharmaceuticals, automobile, and information technology have joined the list. Since gaining independence industry has grown steadily in importance in the country’s economy. The Industrialization Intensity Index measures value added in production—that is, how much monetary value manufacturing processes create in their products (the value of an assembled car, for example, over its separate raw materials)—against Gross Domestic Product (GDP). In this measure, India’s economy has been and remains significantly more industrialized than the world average.

Population, 1800-2018.

Between 1950 and 2020, India’s population has grown from 359 million to 1.409 billion, growth of nearly 400%. Since 1960, its economy has grown from $136 billion to $2.5 trillion, an increase of more than 1800%, at the same time becoming more consumption-based, with domestic spending rising dramatically over the forty years from 1973-2012. Energy consumption has also climbed steadily in recent years--as shown, electricity consumption more than doubled between 2010 and 2021. The problem, to be explored in future posts, is that India’s legitimate drive toward renewable energy sources is overwhelmed by the sheer scale of growth in other sectors—a basic problem in nearly all developed and developing countries.

Annual domestic consumption (USD), 1974-2012.

                                                                                                                                                         

Annual electricity consumption, GWh, 2010-2021.

Tomorrow: energy production in India.

Be brave, and be well.