quality:correction, information:filtering, structural:expansion
The economy of India is a developing mixed economy with a notable public sector in strategic sectors. It is the world's fifth-largest economy by nominal GDP and the third-largest by purchasing power parity (PPP); on a per capita income basis, India ranked 136th by GDP (nominal) and 125th by GDP (PPP). From independence in 1947 until 1991, successive governments followed the Soviet model and promoted protectionist economic policies, with extensive Sovietization, state intervention, demand-side economics, natural resources, bureaucrat driven enterprises and economic regulation. This is characterised as dirigism, in the form of the Licence Raj. The end of the Cold War and an acute balance of payments crisis in 1991 led to the adoption of a broad economic liberalisation in India and indicative planning. Since the start of the 21st century, annual average GDP growth has been 6% to 7%., India has about 1,900 public sector companies, Indian state has complete control and ownership of railways, highways; majority control and stake in banking, insurance, farming, dairy, fertilizers & chemicals, airports, nuclear, mining, digitization, defense, steel, rare earths, water, electricity, oil and gas industries and power plants, and has substantial control over digitalization, Broadband as national infrastructure, telecommunication, supercomputing, space, port and shipping industries, among other industries, were effectively nationalised in the mid-1950s. Nearly 70% of India's GDP is driven by domestic consumption; country remains the world's fourth-largest consumer market. Apart from private consumption, India's GDP is also fueled by government spending, investments, and exports. In 2022, India was the world's 10th-largest importer and the 8th-largest exporter. India has been a member of the World Trade Organization since 1 January 1995. It ranks 63rd on the Ease of doing business index and 40th on the Global Competitiveness Index. India has one of the world's highest number of billionaires and extreme income inequality. Economists and social scientists often consider India a welfare state. India is officially declared a socialist state as per the constitution. India's overall social welfare spending stood at 8.6% of GDP in 2021-22, which is much lower than the average for OECD nations. With 586 million workers, the Indian labour force is the world's second-largest. During the Great Recession, the economy faced a mild slowdown. India endorsed Keynesian policy and initiated stimulus measures to boost growth and generate demand. In subsequent years, economic growth revived. In 2021–22, the foreign direct investment (FDI) in India was $82 billion. The leading sectors for FDI inflows were the Finance, Banking, Insurance and R&D. India has free trade agreements with several nations and blocs, including ASEAN, SAFTA, Mercosur, South Korea, Japan, Australia, UAE, and several others which are in effect or under negotiating stage. In recent years, independent economists and financial institutions have accused the government of manipulating various economic data, especially GDP growth rate. The service sector makes up more than 50% of GDP and remains the fastest growing sector, while the industrial sector and the agricultural sector employs a majority of the labor force. The Bombay Stock Exchange and National Stock Exchange are some of the world's largest stock exchanges by market capitalisation. India is the world's sixth-largest manufacturer, representing 2.6% of global manufacturing output. Nearly 65% of India's population is rural, and contributes about 50% of India's GDP. India faces high unemployment, rising income inequality, and a drop in aggregate demand. India's gross domestic savings rate stood at 29.3% of GDP in 2022.