India as a Growing Economy

8/19/2019 India as a Growing Economy

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INDIA AS A GROWING

ECONOMY

INTRODUCTION

Economics as a word comes from the Greek- oikos means

‘family, household, or estate’, and nomos stands for ‘custom,

law’ etc. Thus “household management” or management of

scarce resources is the essential meaning of economics.

Broadly economics is a social science that studies human

actiity aimed at satisfying needs and wants. !t encom"asses"roduction, distri#ution, trade and consum"tion of goods and

serices.

Economy is usually diided into two main #ranches $

%. MICROECONOMICS$&icroeconomics e'amines the economic #ehaiour of

indiidual actors such as consumers, #usinesses,

households etc to understand how decisions are made inthe face of scarcity and what e(ects they hae on larger

economy.2. MACROECONOMICS:

&acroeconomics on the other hand, studies the economy

as a whole and its features like national income,

em"loyment, "oerty, #alance of "ayments and in)ation.

SOME MAJOR TERMS USED TO DESCRIBE THE INDIAN

ECONOMY:

1. Gross Domestic ro!"ct #GD$:!t is the aggregate of total )ow of goods and serices

"roduced #y an economy in a year.


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The G*+ of !ndia is . trillion /0* according to %1.2. Gross N%tio&%' ro!"ct #GN$:

G*+ "lus net factor income from a#road is e2ual to G3+. GNP = GDP + NFIA GNP = C + I + G + (X – M) + NFIANFIA = Net Factor Income from Abroad

The G3+ of !ndia is 4567. !38 #illion 9%1:.(. Net Domestic ro!"ct #ND$ :

The money alue of a nation’s annual out"ut of goods and

serices, less ca"ital consum"tion e'"erienced in

"roducing that out"ut.NDP = Gross domestic product (GDP) – DepreciationNDP = Consumption + Goernment !"penditures

+ Inestment +!"ports # Imports – Depreciation). Net N%tio&%' ro!"ct #NN$ :

33+ is e2ual to 3*+ "lus 3et factor income from a#road.NNP = NDP + NFIA*. er C%+it% I&come #CI$ :

!t im"lies income "er "erson. !t is o#tained #y diiding

national income of the country #y its "o"ulation. The "er

ca"ita income of !ndia is %.1 /0* 9%1:.

CHARACTERISTICS O, INDIAN ECONOMY $

The Eco&om- o I&!i% is the seenth-largest in the world

#y nominal G*+ and the third-largest #y "urchasing "ower

"arity 9+++:. !ndia;s economy #ecame the world;s fastest

growing ma


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a: AGRARIAN ECONOMY $Een after si' decades of inde"endence, 47.? of the

work force of !ndia is still agriculturist and its contri#ution

to Gross *omestic +roduct 9G*+: in %%-% is %1.%?.

#: MI/ED ECONOMY $!ndian economy is a uni2ue #lend of "u#lic and "riate

sector i.e. a mi'ed economy. !n its entire "lan "eriod the

goernment has inested 14? ca"ital in "u#lic sector.

>oweer ma


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IMORTANCE O, STUDYING GROWTH O, INDIAN

ECONOMY $ !ndia;s economy #ecame the world;s fastest growing ma


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contri#uted to 45? of G*+ in %-%6. The agricultural sector is

the largest em"loyer in !ndia;s economy #ut contri#utes to a

declining share of its G*+ 9%5? in %6-%1:. !ndia ranks

second worldwide in farm out"ut. The !ndustry sector has held

a constant share of its economic contri#ution 9? of G*+ in

%6-%1:. The !ndian auto industry is one of the largest in the

world with an annual "roduction of %.17 million ehicles in DH

%6-%1. !ndia has A #illion worth of retail market in %4

and one of world;s fastest growing E-=ommerce markets.

https://en.wikipedia.org/wiki/Agricultural_sectorhttps://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commoditieshttps://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commoditieshttps://en.wikipedia.org/wiki/Industryhttps://en.wikipedia.org/wiki/Retailing_in_Indiahttps://en.wikipedia.org/wiki/Agricultural_sectorhttps://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commoditieshttps://en.wikipedia.org/wiki/List_of_largest_producing_countries_of_agricultural_commoditieshttps://en.wikipedia.org/wiki/Industryhttps://en.wikipedia.org/wiki/Retailing_in_India


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OBJECTI0E :

!n this research our main o#


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DATA A$ALYS%S :

The !ndian economy is #ased on Three 0ector Theory.

The three-sector theory is an economic theory which diides

economies into three sectors of actiity$ e'traction of rawmaterials 9"rimary:, manufacturing 9secondary:, and serices

9tertiary:. !t was deelo"ed #y =olin =lark and Iean Dourastie.

1.RIMARY SECTOR : The "rimary sector of the economy e'tracts or harests

"roducts from the earth. The "rimary sector includes the

"roduction of raw material and #asic foods. @ctiities

associated with the "rimary sector include agriculture9#oth su#sistence and commercial:, mining, forestry,

farming, graJing, hunting and gathering, shing, and

2uarrying. The "ackaging and "rocessing of the raw

material associated with this sector is also considered to

#e "art of this sector. !n deelo"ed and deelo"ing

countries, a decreasing "ro"ortion of workers are inoled

in the "rimary sector. !ndia ranks second worldwide in

farm out"ut. @griculture and allied sectors like forestry,logging and shing accounted for %5? of the G*+ and

em"loyed 4%? of the total workforce in %. @s the

!ndian economy has diersied and grown, agriculture;s

contri#ution to G*+ has steadily declined from %4% to

%%, yet it is still the largest em"loyment source and a

signicant "iece of the oerall socio-economic

deelo"ment of !ndia. =ro" yield "er unit area of all cro"s

has grown since %4, due to the s"ecial em"hasis "lacedon agriculture in the e-year "lans and steady

im"roements in irrigation, technology, a""lication of

modern agricultural "ractices and "roision of agricultural

credit and su#sidies since the Green 8eolution in !ndia.

!ndia is the largest "roducer in the world of milk,


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egeta#le "roducer, accounting for %.? and 7.? of the

world fruit and egeta#le "roduction res"ectiely. !ndia is

also the second largest "roducer and the largest consumer

of silk in the world, "roducing 55, tons in 4.

!ndia e'"orts seeral agriculture "roducts, such asBasmati rice, wheat, cereals, s"ices, fresh fruits, dry fruits,

#u(alo #eef meat, cotton, tea, co(ee and other cash cro"s

"articularly to the &iddle East, 0outheast and East @sian

countries. !t earns a#out % "ercent of its e'"ort earnings

from this trade.

2.SECONDARY SECTOR : The secondary sector of the economy manufactures

nished goods. @ll of manufacturing, "rocessing, and

construction lies within the secondary sector. @ctiities

associated with the secondary sector include metal

working and smelting, automo#ile "roduction, te'tile

"roduction, chemical and engineering industries,aeros"ace manufacturing, energy utilities, engineering,

#reweries and #ottlers, construction, and shi"#uilding.

!ndustry accounts for ? of G*+ and em"loys ? of the

total workforce. @ccording to the Forld Bank, !ndia;s

industrial manufacturing G*+ out"ut in %4 was th

largest in the world on current /0 dollar #asis 9A44

#illion:, and th largest on in)ation ad


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economic li#eralisation in !ndia economic reforms of %%,

which remoed im"ort restrictions, #rought in foreign

com"etition, led to the "riatisation of certain goernment

owned "u#lic sector industries, li#eralised the D*! regime,

im"roed infrastructure and led to an e'"ansion in the

"roduction of fast moing consumer goods. +ost-

li#eralisation, the !ndian "riate sector was faced with

increasing domestic as well as foreign com"etition,

including the threat of chea"er =hinese im"orts. !t has

since handled the change #y s2ueeJing costs, ream"ing

management, and relying on chea" la#our and new

technology. >oweer, this has also reduced em"loyment

generation een #y smaller manufacturers who earlier

relied on relatiely la#our-intensie "rocesses.

i. etro'e"m +ro!"cts %&! cemic%'s :+etroleum "roducts and chemicals are a ma


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The state of Gu


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music, theater, etc.:, restaurants, clerical serices, media,

tourism, insurance, #anking, healthcare, and law. !n most

deelo"ed and deelo"ing countries, a growing "ro"ortion

of workers are deoted to the tertiary sector. !ndia;s

serices sector has the largest share in the G*+,

accounting for 45? in %, u" from %4? in %4. !t is

the th largest in the world #y nominal G*+, and fourth

largest when "urchasing "ower is taken into account. The

serices sector "roides em"loyment to 5? of the work

force. !nformation technology and #usiness "rocess

outsourcing are among the fastest-growing sectors, haing

a cumulatie growth rate of reenue 66.? #etween %5

and %7 and L6 and contri#uting to 4? of the

country;s total e'"orts in 5L7.The growth in the !T

sector is attri#uted to increased s"ecialisation, and an

aaila#ility of a large "ool of low cost, highly skilled,

educated and )uent English-s"eaking workers, on

the su""ly side, matched on the demand side #y

increased demand from foreign consumers interested in

!ndia;s serice e'"orts, or those looking to outsource their

o"erations. The share of the !ndian !T industry in the

country;s G*+ increased from 1.7? in 4L to 5? in

7. !n , seen !ndian rms were listed among the

to" %4 technology outsourcing com"anies in the world.

i. Energy and +ower $

!ndia;s oil reseres meet 4? of the country;s domestic

oil demand. @s of %, !ndia;s total "roen oil reseresof 4.4 million #arrels 975 million litres:, while gasreseres stood at 16,7 million cu#ic feet9%,1 million cu#ic metres:.

ii. !nfrastructure $

!ndia;s infrastructure and trans"ort sector contri#utesa#out 4? of its G*+. !ndia has the world;s second

largest road network in 2uantitatie terms coeringmore than 1.6 million km.

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#Nominal_GDP_sector_compositionhttps://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#PPP_GDP_sector_compositionhttps://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#PPP_GDP_sector_compositionhttps://en.wikipedia.org/wiki/Business_process_outsourcinghttps://en.wikipedia.org/wiki/Business_process_outsourcinghttps://en.wikipedia.org/wiki/Supply_and_demandhttps://en.wikipedia.org/wiki/Outsourcinghttps://en.wikipedia.org/wiki/Indian_IT_industryhttps://en.wikipedia.org/wiki/Oil_reserveshttps://en.wikipedia.org/wiki/Indian_Road_Networkhttps://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#Nominal_GDP_sector_compositionhttps://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#PPP_GDP_sector_compositionhttps://en.wikipedia.org/wiki/List_of_countries_by_GDP_sector_composition#PPP_GDP_sector_compositionhttps://en.wikipedia.org/wiki/Business_process_outsourcinghttps://en.wikipedia.org/wiki/Business_process_outsourcinghttps://en.wikipedia.org/wiki/Supply_and_demandhttps://en.wikipedia.org/wiki/Outsourcinghttps://en.wikipedia.org/wiki/Indian_IT_industryhttps://en.wikipedia.org/wiki/Oil_reserveshttps://en.wikipedia.org/wiki/Indian_Road_Network


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iii. 8etail $

8etail industry contri#utes #etween %1L%4? to ? of!ndia;s G*+. The !ndian retail market is estimated to #e

/0A14 #illion and one of the to" e retail markets inthe world #y economic alue. !ndia is one of the fastest-growing retail market in the world, and is "ro


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The G*+ contri#ution of di(erent sectors is shown #elow $


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GROSS DOMESTIC RODUCT #GD$ GROWTH :

!t is the aggregate of total )ow of goods and serices

"roduced #y an economy in a year.

The G*+ of !ndia is . trillion /0* according to %1. The Gross *omestic +roduct 9G*+: in !ndia was worth

. #illion /0 dollars in %1. The G*+ alue of !ndia

re"resents 6.66 "ercent of the world economy. G*+ in

!ndia aeraged 44.5 /0* Billion from %5 until %1,

reaching an all time high of . /0* Billion in %1and a record low of 6.4 /0* Billion in %5.


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0ince the economic li#eralisation of %%, !ndia;s G*+ has #een

growing at a higher rate.

Ye%r Gro4t #re%'$ #5$

4.

% .

1.6

6 7.6

1 .

4 7.1

.


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Ye%r Gro4t #re%'$ #5$

5 .

7 5.1

5.1

% 5.%

%% .7

% .4

%6 4.%

%1 .

%49estimates: 5.4

GROSS NATIONA RODUCT #GN$ GROWTH:

G*+ "lus net factor income from a#road is e2ual to G3+.

GNP = GDP + NFIA

GNP = C + I + G + (X – M) + NFIA

NFIA = Net Factor Income from Abroad

The G3+ of !ndia is 4567. !38 #illion 9%1:.

Gross 3ational +roduct in !ndia increased to 4567. !38

Billion in %1 from 41%. !38 Billion in %6. Gross

3ational +roduct in !ndia aeraged %17.1 !38 Billion from

%4% until %1, reaching an all time high of 4567. !38

Billion in %1 and a record low of 57.55 !38 Billion in %4%.

Gross 3ational +roduct in !ndia is re"orted #y the =entral

0tatistical Mrganisation.


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ER CAITA INCOME GROWTH :

!t im"lies income "er "erson. !t is o#tained #y diiding national

income of the country #y its "o"ulation. The "er ca"ita income

of !ndia is %.1 /0* 9%1:.

The Gross *omestic +roduct "er ca"ita in !ndia was last

recorded at %.1 /0 dollars in %1. The G*+ "er =a"ita in

!ndia is e2uialent to % "ercent of the world;s aerage. G*+"er ca"ita in !ndia aeraged 155.4 /0* from % until %1,

reaching an all time high of %.1 /0* in %1 and a record

low of 7.61 /0* in %. G*+ "er ca"ita in !ndia is re"orted

#y the Forld Bank.


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E/TERNA TRADE AND IN0ESTMENT :

G'o6%' tr%!e re'%tio&s: /ntil the li#eralisation of %%,!ndia was largely and intentionally isolated from the world

markets, to "rotect its economy and to achiee self-reliance.

Doreign trade was su#


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"roducts, chemicals and "harmaceuticals, gems and


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,OREIGN DIRECT IN0ESTMENT $ !ndia @s the third-

largest economy in the world in +++ terms, !ndia has

attracted foreign direct inestment. *uring the year%%, D*! in)ow into !ndia stood at A6.4 #illion, 4%.%?

higher than % gure of A1.%4 #illion. !ndia has

strengths in telecommunication, information technology

and other signicant areas such as auto com"onents,

chemicals, a""arels, "harmaceuticals, and


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Mer the -% "eriod, D*! #y !ndian com"anies

outside !ndia amounted to %.61 "er cent of its G*+.


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Share of top ve investing countries in FDIinows. (2000–2010

R%&7 Co"&tr-I&8o4s

#mi''io& USD$I&8o4s #5$

% &auritius 4,%1 1.

0inga"ore %%,54 .

6 /0@ 7,%1 5.

1 /K ,%47 4.

4 3etherlands 1,7 1.

,I0E YEAR ANS #,Y$:

Die-Hear +lans 9DH+s: are centraliJed and integrated national

economic "rograms. Iose"h 0talin im"lemented the rst DH+ in

the 0oiet /nion in the late %s. &ost communist states and

seeral ca"italist countries su#se2uently hae ado"ted them.

=hina and !ndia #oth continue to use DH+s. !ndia launched its

Dirst DH+ in %4%. =urrently, !ndia is undertaking its %th DH+.


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,Y T%r3et

3ro4t#5$

Act"%'

3ro4t#5$%st DH+9%4%-4: .% 6.

nd DH+9%4-%: 1.4 1.6

6rd DH+9%%-: 4. .7

1th DH+9%-51: 4.5 6.6

4th DH+9%51-5: 1.1 1.7

th DH+9%7-74: 4. 4.5

5th DH+9%74-: 4

7th DH+9%-5: 4. .7

th DH+9%5-: .4 4.1

%th DH+9-5: 7 5.

%%th DH+95-%: 7

%th DH+9%-%5: 7 --

MA9E IN INDIA:


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CONCUSION:

@s o#sered from the arious trends and di(erent "atterns , Fe

can conclude that !ndia;s economy is growing


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RE,ERENCES :

P @nnual 8e"ort %-%6 of the +lanning =ommission of !ndia .

P Twelfth Die Hear +lan 9%-%5: L Daster, &ore !nclusie Q0ustaina#le Growth Rol ! , +lanning =ommission of !ndia Q

we#site of +lanning =ommission of !ndia

P +lanning in !ndia, 8ichard 0 Eckaus , &assachusetts !nstitute

Mf Technology.

P !ndian Economy , 8uddar *att Q K+& 0undharam.

P Eleenth Die Hear +lan and !nclusie Growth L a reiew #y

8uddar *att.

India as a Growing Economy

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