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Indian economy: Strengths & weaknesses

india Updated: Nov 26, 2006 17:23 IST

Highlight Story

Advantage India: There may be innumerable reasons behind India's economic boom but we are highlighting the most crucial ones here.

Huge Human Resource

Every year, nearly 19 million students are enrolled in high schools. Another 10 million students are enrolled in pre-graduate degree courses across India. Moreover, 2.1 million graduates and 0.3 million post-graduates come out of India's non-engineering colleges. While 2.5-3 per cent of them find jobs in other fields or pursue further studies abroad, the rest are opting for employment in the IT industry. Imagine, If the flow from high schools to graduate courses increases even marginally, there shall be a massive increase in the number of skilled workers available to the industry. Even calculated at current rates, there will approximately be 17 million people available to the IT industry by 2008.

Education System

The Indian education system puts strong emphasis on mathematics and science, and resultantly a large number of science and engineering graduates are produced. Proficiencies in quantitative concepts coupled with good knowledge of English language has resulted in a skill set that enables the country to take advantage of the current international demand for IT.

Key Development Indicators

GROWTH: (2004/05-2005/06 Revised Estimates)


GDP: 8.4%

Agriculture: 3.9%

Industry: 7.6%

Services:   10.3%

Merchandize Exports: 23%


Poverty (at $1 a day, 2000, PPP): 35%

Fertilityrate 2004: 3 births per woman

Average life expectancy at birth (1998-02): 63 years

Infant mortality (per 1000 live births, 2004): 62

MaternalMortality (per 100,000 live births, 2001):540

Child Malnutrition (below 5 years, 1998): 47%

Primary school enrolment, net 2004: 87%;

Gap between boys’ and girls’ enrolment reduced

Male Adult literacy 2000-04:

Female Adult literacy 2000-04: 47.8%

Access to improved water source 2001: 86%Improved sanitation facilities 2002: 30%

(Source: World Development Indicators, 2006 and CSO revised estimates of GDP)

Quality Manpower

Indian programmers have established their credentials for strong technical skills and their eagerness to accommodate clients. In some instances, clients outsource work to get access to specialized engineering talent, particularly in the area of telecommunications and computer science related areas. India also has one of the largest pools of English-speaking professionals.

Other merits at a glance:

• Great record of software development

• Government support and policies

• English language proficiency

• Strong tertiary education

• Process quality focus

• Skilled workforce

• Cost advantage

• Entrepreneurship

• Reverse brain drain

• Expansion of existing relationships

• Leverage relationships in West to access overseas markets

• Indian domestic-market growth