Indian GDP- Thinking

beyond….
 The Challengers
• Group members
Ø Soniya Dhiman
Ø Gopalji Yadav
Ø Munendra Sharma
Ø Ramkishore Mishra
Ø Ujjal Das
Ø Pankaj Tanwar
Ø Ajay Rana


•
 About GDP…


• The Gross Domestic Product or GDP is a measure of all of the

services and goods produced in a country over a specific
period, classically a year.
• Formula of GDP
 GDP =Y = C + I + G + (X − M)
• C (consumption) is normally the largest GDP component,
consisting of private household expenditures in the economy.
• I (investment) includes business investment in plant, equipment,
inventory, and structures, and does not include exchanges of
existing assets.
• G (government spending)is the sum of government
expenditures on final goods and services. It includes salaries of
public servants, purchase of weapons for the military, and any
investment expenditure by a government.
• X (exports) represents gross exports.
• M (imports) represents gross imports.
•

 India GDP growth rate in 2009
• According to International Monetary Fund (IMF) economic
growth rate of India is predicted to dip by 6.9 per cent in the
fiscal year 2009. IMF has further stated that this relegation is
unavoidable because the Asian nations are not fully
impervious to the global financial crisis and its consequent
negative effects.

IMF's World Economic Outlook (WEO), released in

Washington on October 8, 2008, explains the slopping of GDP
growth rate in the last three years. In 2007 GDP growth rate
was 9.3 per cent while in 2008 it dipped to 7.8 per cent and
would end up at 6.9 per cent in 2009.

•
 GDP by sector (2009
Estimate):
 Agriculture: 17.2%
Industry: 29.1%
Services: 53.7%
 Sectors that drives the GDP
• Information Technology
• Information Technology Enabled
Services
• Telecommunications
• Electronics and hardware
• Automobiles
• Pharmaceuticals and biotechnology
• Consumer durables
• Retail

 Cont…
• Textiles
• Infrastructure
• Construction
• Airlines
• Hospitality
• Power
• Oil and natural gas
• Fertilizers and chemical
•
 Growth Expected in India
2006
2006
qG D P – U S D 1 5 0 billion
qG D P g ro w th ra te – 9 %
qS e rvice s co n trib u tio n – 5 4 %
qFD I lim it n o t 1 0 0 p e rce n t in
m a jo r in d u stry se cto rs su ch a s
Te le co m , S e m ico n d u cto rs,
A u to m o b ile s, e tc .
qB a la n ce o f Tra d e – U S D (-) 4 6 . 2
b illio n
qIn ve stm e n t g o a l – U S D 2 5 0
b illio n
2008
2008
qGDP – USD 200 billion
qGDP growth rate – 9.5%
qServices contribution – 60 %
qFDI limit is expected to be
close to 100 percent in major
industry sectors such as
Telecom, Semiconductors,
Automobiles, etc.
qBalance of Trade – Should
increase with surging exports
as compared with imports
qInvestment goal – USD 305
billion
2010
2010
qGDP – USD 350 billion
qGDP growth rate – 9%
qServices contribution – 60-65 %
qFDI limit is expected to be 100
percent in major industry
sectors such as Telecom,
Semiconductors, Automobiles,
etc.
qBalance of Trade – Should be
positive with increased level
of exports as compared with
imports
qInvestment goal – USD 370
billion
 Factors affecting GDP
• Industrial Production
• Productivity
• Employment and Unemployment
• Prices
• Stock Market
 How to increase the GDP
1.Making Growth More Inclusive
 - Small and medium enterprises (SME)

- Agricultural and rural development

- Informal Sector Jobs

- Lagging States
 2. Improving Infrastructure
 - Infrastructure
 - Power
 - Transport
 - Urban Development
 Cont…
 3. Addressing Issues for Longer-Term
Sustainability
 - Adapting to climate change and the growing scarcity of
water Improving energy efficiency and ensuring adequate
energy supplies. Coping with accelerating urbanization through
strengthened urban governance Protecting India’s fragile
environment in the face of the rising pressures created by
economic success.
 4. Improving the effectiveness of
public services and social protection,
especially to the poor
 - Education
 - Skills
 - Health
 - Safety Nets
 Limitations of Indian GDP
• Wealth distribution
• Quality of goods
• Externalities
• Sustainability of growth
• Non-market transactions
• Does not count black markets.
 Recommendations

• Creating more employment

opportunities
• Foreign direct investment
• Investment by the government
• Improving export
• Monetary policy of RBI
• Reliability of data
•
•
•
 Conclusion
• India is considered as one of the best players in
the world economy in the past few decades,
but rapidly increasing inflation and the
intricacies in administering the world’s biggest
democracy are acting as the major hurdle in
the field of development.
• Expansion is assisted by markets restructuring,
huge infusions of FDI, increasing foreign
exchange reserves, boom in both IT and real
estate sectors, and a thriving capital market.