India - Asia The Indian economy is the world's eleventh-largest by nominal GDP and third-largest by purchasing power parity (PPP). Following market-based economic reforms in 1991, India became one of the fastest-growing major economies; it is considered a newly industrialised country. However, it continues to face the challenges of poverty, corruption, malnutrition, inadequate public healthcare, and terrorism. A nuclear weapons state and a regional power, it has the third-largest standing army in the world and ranks eighth in military expenditure among nations. India is a federal constitutional republic governed under a parliamentary system consisting of 28 states and 7 union territories. India is a pluralistic, multilingual, and a multi-ethnic society. It is also home to a diversity of wildlife in a variety of protected habitats. According to the International Monetary Fund (IMF), as of 2013, the Indian economy is nominally worth US$1.842 trillion; it is the eleventh-largest economy by market exchange rates, and is, at US$4.962 trillion, the third-largest by purchasing power parity, or PPP. India had an average annual GDP growth rate of 5.8% over the past two decades, and reached 6.1% during 2011–12. However, the country ranks 140th in the world in nominal GDP per capita and 129th in GDP per capita at PPP. Until 1991, all Indian governments followed protectionist policies that were influenced by socialist economics. Widespread state intervention and regulation largely walled the economy off from the outside world. An acute balance of payments crisis in 1991 forced the nation to liberalise its economy;since then it has slowly moved towards a free-market system by emphasising both foreign trade and direct investment inflows.India's recent economic model is largely capitalist. India has been a member of WTO since 1 January 1995. The 486.6-million worker Indian labour force is the world's second-largest, as of 2011. The service sector makes up 55.6% of GDP, the industrial sector 26.3% and the agricultural sector 18.1%. Major agricultural products include rice, wheat, oilseed, cotton, jute, tea, sugarcane, and potatoes.Major industries include textiles, telecommunications, chemicals, pharmaceuticals, biotechnology, food processing, steel, transport equipment, cement, mining, petroleum, machinery, and software.In 2011, India was the world's tenth-largest importer and the nineteenth-largest exporter. Major exports include petroleum products, textile goods, jewellery, software, engineering goods, chemicals, and leather manufactures. Major imports include crude oil, machinery, gems, fertiliser, and chemicals. Between 2001 and 2011, the contribution of petrochemical and engineering goods to total exports grew from 14% to 42%. Averaging an economic growth rate of 7.5% for several years prior to 2007, India has more than doubled its hourly wage rates during the first decade of the 21st century. Though ranking 51st in global competitiveness, India ranks 17th in financial market sophistication, 24th in the banking sector, 44th in business sophistication, and 39th in innovation, ahead of several advanced economies, as of 2010.With 7 of the world's top 15 information technology outsourcing companies based in India, the country is viewed as the second-most favourable outsourcing destination after the United States, as of 2009. India's consumer market, currently the world's eleventh-largest, is expected to become fifth-largest by 2030. India's telecommunication industry, the world's fastest-growing, added 227 million subscribers during the period 2010–11, and after the first quarter of 2013, India surpassed Japan to become the third largest smartphone market in the world after China and the U.S. Its automotive industry, the world's second fastest growing, increased domestic sales by 26% during 2009–10, and exports by 36% during 2008–09. Power capacity is 250 gigawatts, of which 8% is renewable. At the end of 2011, Indian IT Industry employed 2.8 million professionals, generated revenues close to US$100 billion equaling 7.5% of Indian GDP and contributed 26% of India's merchandise exports. The Pharmaceutical industry in India is among the significant emerging markets for global pharma industry. The Indian pharmaceutical market is expected to reach $48.5 billion by 2020. India's R & D spending constitutes 60% of Biopharmaceutical industry. India is among the top 12 Biotech destinations of the world. The Indian biotech industry grew by 15.1% in 2012-13, increasing its revenues from 204.4 Billion INR (Indian Rupees) to 235.24 Billion INR (3.94 B US$ - exchange rate June 2013: 1 US$ approx. 60 INR) Although hardly 2% of Indians pay income taxes. Despite impressive economic growth during recent decades, India continues to face socio-economic challenges. India contains the largest concentration of people living below the World Bank's international poverty line of US$1.25 per day, the proportion having decreased from 60% in 1981 to 42% in 2005, and 25% in 2011 44% of India's children under the age of five are underweight, half the children under five suffer from chronic malnutrition, and in the states of Madhya Pradesh, Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Jharkand, Karnataka, and Uttar Pradesh, which account for 50.04% of India's popultion, 70% of the children between the ages of six months and 59 months are anaemic. The Mid-Day Meal Scheme attempts to lower these rates.Since 1991, economic inequality between India's states has consistently grown: the per-capita net state domestic product of the richest states in 2007 was 3.2 times that of the poorest. Corruption in India is perceived to have increased significantly, with one report estimating the illegal capital flows since independence to be US$462 billion. Driven by growth, India's nominal GDP per capita has steadily increased from US$329 in 1991, when economic liberalisation began, to US$1,265 in 2010, and is estimated to increase to US$2,110 by 2016; however, it has remained lower than those of other Asian developing countries such as Indonesia, Iran, Malaysia, Philippines, Sri Lanka, and Thailand, and is expected to remain so in the near future. While it is currently higher than Pakistan, Nepal, Bangladesh and others. According to a 2011 PricewaterhouseCoopers report, India's GDP at purchasing power parity could overtake that of the United States by 2045.During the next four decades, Indian GDP is expected to grow at an annualised average of 8%, making it potentially the world's fastest-growing major economy until 2050. The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle class. The World Bank cautions that, for India to achieve its economic potential, it must continue to focus on public sector reform, transport infrastructure, agricultural and rural development, removal of labour regulations, education, energy security, and public health and nutrition. Citing persistent inflation pressures, weak public finances, limited progress on fiscal consolidation and ineffectiveness of the government, rating agency Fitch revised India's Outlook to Negative from Stable on 18 June 2012. Another credit rating agency S&P had warned previously that a slowing GDP growth and political roadblocks to economic policy-making could put India at the risk of losing its investment grade rating.However, Moody did not revise its outlook on India keeping it stable,but termed the national government as the "single biggest drag" on business activity.