India’s Economy and Standard of Living

August 7th, 2010 Posted in Canada|Global Economy

India's Economy and Standard of Living The Standard Of Living in India

India is a developing country that is on the way to becoming developed. Its economy is growing rapidly and that is helping to raise the standard of living. This is important for investors to know because the faster that India grows its standard of living, the more people within the country who will have buying power. The more buying power, the more money flowing through the country.

The current purchasing price parity adjusted gross domestic product in India is $3,176, which is still quite low. However, India has a growth rate of roughly eight percent per year, which means that it is growing quite fastest and it has what may be the largest middle class in the world. The current number of citizens in the Indian middle class stands at 300 million; however this is by Indian standards, which is lower than the standards set in Europe and the United States. However, the growing middle class means that by 2015, the PPP-Adjusted GDP will be six percent higher than it is now. The level of poverty has also gone down in India over the past few years, currently sitting at 22 percent of Indians living under the poverty line. This number used to be much higher and India is hoping to eradicate poverty by the year 2020.

Rural areas have much higher level of poverty when compared with the cities and currently 24.3 percent of the population lives on $1 per day, which is down from levels seen in 1981, which were as high as 42 percent.

India has seen the same type of effect on its economy as China has seen. As the country begins to build more and more infrastructure, export more and import more, the level of money for each individual then goes up. This means that people are able to purchase more, which raises their standard of living and the standard of living for the people they buy from. Current estimates have India increasing its middle class by 100 million in the next decade given how fast the economy is going.

It should be noted that India did see a slowdown during the recession that gripped the world in 2009-10, but that is beginning to change and once again the country is moving forward. However, during that recession, the country still had a very high growth rate for its economy.

In addition, the infrastructure of the country is also improving. There are roughly one million broadband lines in India, with 76 percent of the lines available via DSL and the rest available through cable modems. For water infrastructure, it is much worse for the country with no city within India having a continuous water supply, with the longest solid duration of water only being 12 hours a day. Some cities only had water for half an hour a day.

Even with some of these problems, India is working to fix them and make the country a world leader as a developed country. As the years go by, things are looking up for this highly populated country.

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