Macroeconomic Analysis of India's Economy

India is located in the northern part of the equator. The country is the seventh largest in the world (Ahluwalia, 2008). To the south, India is bordered by the Indian Ocean and the Arabian Sea to the west. On the eastern side is the Bay of Bengal and Lakshadweep Sea to the south-east coastline. India borders China, Bhutan, and Nepal to the north, her western border is to Pakistan. GDP Analysis Statistics show that the GDP of the Indian economy is worth $ 2. 439 trillion as at the year 2017 and a power purchasing parity of $9. 446 trillion thus making India the sixth largest GDP and third largest in the PPP (Tiwari, 2015). India was ranked the fastest growing economy in the year 2015 to 2016 whereby the economy back then grew by 7.

2016/2017 fiscal year the growth declined to 7. The agriculture industry is doing well in the Indian economy as it is ranked second, worldwide in its output. The Monetary System Analysis The banking system in India evolved in the 18thcentury. Originally, there was state bank of India which was funded by presidency government and the other two were the banks of Bombay and bank of Madras which existed until 1935 when the reserve bank was established and became the central bank of India (Neuenkirch, 2011). However, the banking system is divided into scheduled and nonscheduled banks. The scheduled further include the nationalized and state bank of India and its associates. Over the years India has made great strides in ensuring that government borrowing is properly controlled and within acceptable limits (Camagni & Capello, 2010).

However, the rate of Indian firms paying back their debts has declined rapidly over time. India has been rank 3rd lowest with indebtedness. External Sector Analysis. The external sector is considered as the portion or aspect of an economy that interacts with other economies of the world through international transactions majorly imports and exports. 7% that is, through the sale of engineering products, drugs and pharmaceuticals, gems, jewelry and petroleum products. India has recorded a negative value and this shows trade deficit but still ranked as a manageable and sustainable deficit (Neuenkirch, 2011). The two commonly traded goods by India are gold and mineral fuels for both imports and exports. India exports to several countries basically, which include Bhutan, Guinea, Bissau, Nepal, and Nigeria.