GDP and India

GDP and India

India, a developing economy in the world market, has set its base to lead through the way. Various basics and super strong foundations of economic decisions are ready to lead India to the top position in the world trade and technology. It gives a strong prospect to the Indian economy to compete at the international level.

India is said to be the 5th largest economy in terms of nominal GDP. Gross Domestic Product, is the unit for measuring the nominal growth of the economy as a whole. It includes the over all usage by the country in terms of production, distribution and consumption of materials such as goods and services. It also includes the trade in terms of export and import, to and from the country. Indian GDP gives out a simple but a deep formula of that particular usage. 

Consumption expenditure (C) + Investment expenditure (I) + Government expenditure (G)+ (Exports - Imports)= Indian GDP.

When India attained Independence in 1947, 90% of the Indian population was below the poverty line. And the literacy rate was below 17%. But until 2019, Indian economy has developed way ahead of time. BPL rates have fallen to 37.4% and the literacy rate has risen to an estimate of 67%. In these terms, India is a fastly growing and developing economy in the world. The growth rate of India also beats the respective growth rates of super powers such as China, USA and Russia. The technological renovation of India is faster than that of Japan. 

Indian GDP has grown and developed with great numbers. Many many industries, businesses, sectors, etc. contribute to India's GDP. Industrial contribution to the GDP is more than 30%. Tourism in India contributes the highest to India's GDP i.e. 47%. The service sector has become a vital part of the Indian economy. The contribution of the household sector is 51.9%, Government consumption is 11.5%, whereas investment consumption is 32.4%, exports contribute to 19.1%, whereas imports give upto 22% and much more; as per the estimate GDP ratings of 2018. Employment rate of India leads to 45.3% of total national population. 

Both economic production and growth–which GDP represents–have a large impact on nearly everyone within that economy. For example, when the economy is healthy, there will typically be low unemployment and wage increases as businesses demand labour to meet the growing economy. A significant change in GDP, whether up or down, usually has a significant effect on the stock market. It is not difficult to understand why—a bad economy usually means lower earnings for companies. This, in turn, translates into lower stock prices. Investors often pay attention to both positive and negative GDP growth when assessing an investment idea or devising with an investment strategy. 

Manufacturing remains as one of its crucial sectors and is being given due push via the governments' initiatives, such as "Make in India." Although the contribution of its agricultural sector has declined, it still is way higher in comparison to the western nations. The economy's strength lies in a limited dependence on exports, high saving rates, favorable demographics, and a rising middle class.

With consecutive and rigorous up and downs, the GDP rate and the growth rates of India are getting better with increasing sectoral contributions and international trade transactions. But the GDP has been subject to high fluctuations in the recent past, a result of ongoing fight of inflation vs recession. This leads to many conflicts among the national incomes, their expenditures and the estimated budget at large. The continuation of this, may definitely lead to the fall of the Indian economy.

But this is can be still turned around. The developing country of India has been running milestones since independence to compete vigorously against world economies. This is the best part of the Indian economy; it doesn't fall short even when the times are not favourable.A progressive attitude and efficient management will surely help India in overcoming the GDP hurdle and still lead in the super power race in the upcoming decade.

~ Maitreyee N. Raote

 SYBCOM