...India’s GDP and Information Technology Group 5 – Div A Tejaswini Vaidya Mohit Mittal Harshul Trivedi Akshay Mohta Tomy Augustine Contents India’s GDP 3 IT and India 4 IT and its Contribution to GDP 4 Investments in the IT sector in India 5 Education & its impact on GDP 8 Conclusion 9 India’s GDP India’s GDP has grown steadily since 1991, after the Prime Minister Narasimha Rao initiated the economic liberalization of 1991. The reform reduced tariffs and interest rates, terminated public monopolies and allowed autocratic approval of FDI ( Foreign Direct Investments) in many sectors. Fig 1: India – Gross Domestic Product The GDP of India is essentially divided into three broad sectors. 1. Industry and Services: Accounts for 26.3% of the total GDP 2. Agriculture: 18.1% of the total GDP 3. Services: 56.6% of the GDP 4. Total Labor force: 487.6 million 5. Labor force in services: 34% ~ 165.5 million IT and India India gained recognition due to its IT and ITES sector. The ITES can be broadly classified into IT Services and BPO (Business processing outsourcing). The first software export zone setup in India was in Mumbai, the SEEPZ Park, in 1973. Significant growth has taken place since then in the IT Services sector and consequently the net contribution to the GDP has been growing ever since. India’s reputation as both as a source and a destination for skilled workforce helped improve its relations with a number of world economies...
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... Introduction to area of study India has come a long way in terms of economic growth. There is broad consensus that the global centre of economic growth is moving to Asia, and as a large emerging nation with a growing middle class, India has captured the attention of developed economies looking for new investment and trade opportunities. The Softer indicators of economy – aspirations, health, and literacy – are all registering discernible improvements. Over two decades, India has implemented wide-ranging reforms that opened up the economy, dismantled the old licensing system and introduced competition into a number of sectors that had previously been dominated by public monopolies. Now, we live in a generation of relative abundance. While for the Western world it is going to be a demographic winter, we in India with some effort should be reaping a demo- graphic dividend. It is an India full of goodies –better consumption and lifestyle are in attendance all around. From the past two decades, we saw the twists in its growth and also twist in political atmosphere. With 27 per cent of the economy stagnant, it is no surprise that overall growth in India has slipped below 6 per cent. We are referring to the industrial sector, which has recorded an insipid 0.4 per cent growth in the first five months of this fiscal year beginning April 2013. It needs no emphasis that without a turnaround in this sector, a material lift to India's GDP growth is not possible. Industrial growth had slipped during the...
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...Indian Economy is currently experiencing strong growth adverse to difficulties witnessed after the global financial crisis. Current GDP levels at approximately $1.5 US Dollars as the fifth largest economy in the world. The aim of this paper is to address macroeconomic conditions that may affect India’s ability to maintain high levels of growth. Monetary and Fiscal policy have been analysed and recommendations made to manage inflation, employment and debt. Tax increases on higher earners and other possible consumption taxes would slow aggregate demand but allow government to increase its spending. Inflationary pressures are as a result of the economy not being able to meet supply requirements and investment in agricultural practise and increase in the manufacturing sector should assist in reducing inflation which is 11.7%. This will also have positive effects on employment which will allow India to reach higher levels of GDP in the long term. Other areas of long term planning will be for improved and widespread access to education and move people into the services sector which currently employs only 34% of people compared with 52% in agriculture and 14% in manufacturing. In the short term the migration of workers from agriculture into manufacturing is a possibility. Diversion of higher taxes to reduce debt levels sitting at 55.9% and long term increase in employment would also fund the ability to service debt. Exchange rates are also a focus for government. If the economy...
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...------------------------------------------------- Sectors[edit] Percent labor employment in India by its economic sectors (2010).[110] The GDP contribution of various sectors of Indian economy have evolved between 1951 to 2013, as its economy has diversified and developed. Historically, India has classified and tracked its economy and GDP as three sectors — agriculture, industry and services. Agriculture includes crops, horticulture, milk and animal husbandry, aquaculture, fishing, sericulture, aviculture, forestry and related activities. Industry includes various manufacturing sub-sectors. India's definition of services sector includes its construction, retail, software, IT, communications, hospitality, infrastructure operations, education, health care, banking and insurance, and many other economic activities.[111][112] Agriculture[edit] Rice fields near Puri, Odisha on East Coast Main articles: Agriculture in India, Forestry in India, Animal husbandry in India, Fishing in India and Natural resources in India India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted for 17% of the GDP and employed 49% of the total workforce in 2014.[113] As the Indian economy has diversified and grown, agriculture's contribution to GDP has steadily declined from 1951 to 2011, yet it is still the largest employment source and a significant piece of the overall socio-economic development of India.[114] Crop yield per unit area of all...
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...transformed into a manufacturing economy, or a regulated mixed economy is liberalized. A current structural change in the world economy is globalization. Tabular representation of Indian GDP The Three Sectors of the Indian Economy Agriculture More than 52% of country's population depends on agriculture, a sector contributing only 17.5% of the GDP. Food grain production in 2009/10 is expected at 216.9mt, which is 17.6mt lower than the output in 2008/09. The Kharif season is the largest contributor to this shortfall, with total production of only 99.9mt, a decline in production of nearly 18mt. The rice output in the kharif season amounted to 12mt less than that in 2008. However, this shortfall is expected to be compensated to an extent by the rabi harvest. Wheat production in the rabi season is expected to be almost flat with the previous year’s levels and rice production, currently at 14.7mt, may eventually turn out to be higher than 2008 production. Taking this into consideration, the shortfall in rice production for the year as a whole may be restricted to 11mt. While looking at some of the agricultural products, one finds that India is the largest producer of tea, jute and jute like fiber. India is not only the largest producer but also the largest consumer of tea in the world. India accounts for more than 15% of the global tea trade. Indian tea is exported in various forms, such as tea bags...
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...Economic growth is measured in terms of an increase in the size of a nation's economy. A broad measure of an economy's size is its output. The most widely-used measure of economic output is the Gross Domestic Product (abbreviated GDP). GDP generally is defined as the market value of the goods and services produced by a country. One way to calculate a nation's GDP is to sum all expenditures in the country. This method is known as the expenditure approach and is described below. Alternative Approaches to Calculating GDP There are three approaches to calculating GDP: * Expenditure approach - described above; calculates the final spending on goods and services. * Product approach - calculates the market value of goods and services produced. * Income approach - sums the income received by all producers in the country. Expenditure Approach to Calculating GDP The expenditure approach calculates GDP by summing the four possible types of expenditures as follows: GDP | = | Consumption | | + | Investment | | + | Government Purchases | | + | Net Exports | Consumption is the largest component of the GDP. In the U.S., the largest and most stable component of consumption is services. Consumption is calculated by adding durable and non-durable goods and services expenditures. It is unaffected by the estimated value of imported goods. Investment includes investment in fixed assets and increases in inventory. Government purchases are equal to the government expenditures...
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...Detail of Service sector from 2009-10 Name: Shiva Kr. Yadav Roll No. 11316603911 SERVICES SECTOR: INTERNATIONAL COMPARISON Conventional wisdom suggests that during the early development phase of any country, expansion of output in manufactured goods precedes growth in the services sector. As a country progresses further manufacturing often takes a back seat, giving way to the services sector in terms of both output and employment, and manufacturing firms themselves become increasingly service centric in order to remain competitive. Some have argued that the decline in manufacturing and corresponding shift to services is unsupportable in the long run as services depend critically on manufacturing for their demand. Although this argument may be applicable for certain services such as retailing and transportation, it does not entirely hold for many other services. IT in particular very high services sector growth. Russia at 5.5 per cent and Brazil at 4.0 per cent are a distant third and fourth respectively. While India’s growth rate of the services sector at 10.1 per cent in 2009 was higher than that of China at 9.6 per cent, in 2010 it has decelerated to 7.7 per cent while China’s has remained constant (Table 10.1). All this highlights the prominence of the services sector for India. Despite the higher share of services in India’s GDP and China’s dominance in manufacturing over...
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...MAJOR DRIVERS OF GROWTH, EMPLOYMENT AND TRADE IN INDIA INTRODUCTION It is interesting and rewarding to study India as an economy that has evolved over a period of 65 years since its independence. The country has grown economy-wise and population-wise since 1950 and the major contributors to Gross Domestic Product (GDP) has gradually shifted from agricultural sector to the services sector. Widespread globalization of industries and liberalization of trade along with technological advancements have played an important role in adding to its growth. In terms of Purchasing Power Parity India took position as the world’s third largest economy in April 2014 replacing Japan proving to be one of the fastest growing economies of the world (“India displaces Japan,” 2014). For the purpose of clearly understanding the major contributors and policies to the effect India’s growth and development, I have conducted my research under the primary, secondary and tertiary sectors using graphs and figures to explain whenever required. The primary sector being Agriculture, the secondary sector being Industry and the tertiary sector being Services have also been analyzed to indicate the major trading partners of India. A sufficient period of time has been considered for the purpose of this assessment to provide good insight on the topic. The paper will also further discuss some of the recent policy measures taken to further improve the growth of India. ...
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...After going through a long period of high growth and establishing itself as one of the fastest growing economies in the world, the Indian economy is now pegged with a new challenge of maintaining past growth rates whilst taming inflation. The GDP growth rates from 2006-2011 are listed below [1]. As can be seen from the above figure, India's growth rate has declined to 6.9% in 2011-12. Some of the reasons attributable to that are discussed below: 1. India's high growth rate during the previous years was fueled primarily by high growth in Industry and Service sectors. However, the last fiscal year saw significant slowdown in Industrial growth. One of the reasons for this was RBI's initiative to curb inflation. The central bank had consistently maintained high interest rates for more than a year. Even though Inflation came down to 5% [2], it adversely affected the industrial growth. Many organizations curbed their expansion plans and many new ventures were deferred due to high cost of capital. 2. A further analysis of the Structure of Indian Economy reveals other important aspects: Year wise contribution of 3 major sectors viz. Agriculture, Industry and Services to GDP is as under: Table-1 Source: [1] A comparison of the contribution of Rural and Urban India to GDP for FY 2011-12 is as per the following figures: - As can be seen, there is a wide disparity between contributions of Rural and Urban India to GDP. While 69% (approx) of our rural population is...
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...growing importance of MNC’s, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution. The term globalization refers to the integration of economies of the world through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also contains free inter-country movement of labour. The United Nations Economic and Social Commission for Western Asia defines globalization as: "a widely-used term that can be defined in a number of different ways. When used in an economic context, it refers to the reduction and removal of barriers between national borders in order to facilitate the flow of goods, capital, services and labour... although considerable barriers remain to the flow of labour... Globalization is not a new phenomenon. It began towards the end of the nineteenth century, but it slowed down during the period from the start of the first World War until the third quarter of the twentieth century. This slowdown can be attributed to the inward-looking policies pursued by a number of countries in order to protect their respective industries... however, the pace of globalization picked up rapidly during the fourth quarter of the twentieth century. INDIAN ECONOMY: Indian economy had experienced major policy changes in early 1990s. The new economic reform, popularly knownas,...
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...recession India had been growing robustly at an annual average rate of 8.8 per cent for the past five years (2003-04 to 2007-08). This was higher than the potential growth rate of output as estimated by the IMF. The strong Indian growth story, based on its structural strengths of a young population, skilled manpower, rising savings and investment rates, large unfulfilled domestic demand and globally competitive firms attracted significant investor attention in recent years. Recent high rates of economic growth have been the result of high levels of investment, rise in productivity supported by technological up-gradation and greater integration with global flows of trade, finance and technology. The challenge is to sustain these high growth rates while also preventing an unacceptable rise in income and spatial inequities and also eliminating absolute poverty in a given time frame. The answer to this challenge is in raising India’s potential rate of output growth by removing the binding constraints. We have also estimated the potential growth rate for India during the last decade based on HP filter technique (Hodrick and Prescott, 1997) and found that in the last three years, India had been growing above its potential growth rate. Figure 6: Potential GDP Growth and Output Gap (1997-08 to 2007-08) Note: Based on HP filter technique as proposed by Hodrick and Prescott (1997). Fears of over-heating of the economy prompted the Reserve Bank of India (RBI) to begin...
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...opportunity. I will be speaking on the Indian Economy. India is home to 1.21 billion people, which is about 17.4 per cent of the global population. However, it accounts for only 2.4 per cent of world GDP in US dollar terms and 5.5 per cent in purchasing power parity (ppp) terms. Hence, there exists a huge potential for catch up. The global welfare too is linked to progress in India as reflected in the keen global interest in India. But, India seems to inspire and disappoint at the same time. This is reflected in various comments on the Indian economy. Yasheng Huang and Tarun Khanna in their much debated article in July 2003 issue of Foreign Policy had observed: “Can India surpass China? This is no longer a silly question”. The July 23rd 2011 issue of The Economist observed; “Twenty years ago they said the yardstick against which India should be measured was its potential. On that measure, there is much to do.” As a fledgling democracy, India’s economic experiment of planned development was held out as an example to many aspiring low-income countries in the 1950s. While some countries raced ahead in the development process, India lagged behind. This is evident from the fact that it took 40 long years from 1950-51 for India’s real per capita GDP to double by 1990-91. But, 1991-92 was a defining moment in India’s modern economic history as a severe balance of payments (BoP) crisis prompted far reaching economic reforms, unlocking its growth potential. As a result, in only 15 years, India’s...
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...Future of the Power Sector An Analysis Tushar Alva Roll No-2009A06 Executive Summary The electricity sector in India is predominantly controlled by Government of India's public sector undertakings (PSUs) but the private sector is also catching up fast. India is world's 6th largest energy consumer, accounting for 3.4% of global energy consumption. Due to India's economic rise, the demand for energy has grown at an average of 3.6% per annum over the past 30 years. In March 2009, the installed power generation capacity of India stood at 147,000 MW while the per capita power consumption stood at 612 kWH. The country's annual power production increased from about 190 billion kWH in 1986 to more than 680 billion kWH in 2006. India faces a serious shortfall in power generation. During the tenth plan, only 23,000 MW of capacity was added against the original target of 41,000 MW. During the 11th plan, a target of 78,000 MW has been set. Anil Kakodkar, Chairman, Atomic Energy Commission, India had estimated that the per capita electricity generation would reach about 5300 kWh per year in the year 2052 and total about 8000 TWh. The Government of India has an ambitious mission of „POWER FOR ALL‟ BY 2012. This mission would require that the installed generation capacity should be at least 200,000 MW by 2012 from the present level of 144,564.97 MW. Power requirement will double by 2020 to 400,000MW. The ratio of energy generation and GDP growth should be 1:1....
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...ACCOUNTING FOR GROWTH: COMPARING CHINA AND INDIA Barry Bosworth Susan M. Collins Working Paper 12943 http://www.nber.org/papers/w12943 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 February 2007 We are very indebted to Anthony Liu and Gabriel Chodorow-Reich for extensive assistance in understanding the data and constructing the growth accounts. This paper was presented at the annual conference of the Tokyo Club Foundation for Global Studies, December 6-7, 2006. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. © 2007 by Barry Bosworth and Susan M. Collins. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Accounting for Growth: Comparing China and India Barry Bosworth and Susan M. Collins NBER Working Paper No. 12943 February 2007 JEL No. F43,O1,O4 ABSTRACT We compare the recent economic performances of China and India using a simple growth accounting framework that produces estimates of the contribution of labor, capital, education, and total factor productivity for the three sectors of agriculture, industry, and services as well as for the aggregate economy. Our analysis incorporates recent data revisions in both countries and includes extensive discussion of the underlying data series. The growth accounts show...
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...FT161061 | SATHIYANARAYANAN B | FT161078 | SUSINA ROSHNI BORROMEO | FT161094 | ABHISHEK MAHESHWARI | FT164005 | DARSHAN CHANDRASHEKAR | FT164023 | 1) Rate of growth in the country India recorded a strong first quarter GDP of 7.5 % in 2015. One of the biggest contributors to this is the strong expansion in manufacturing segment which grew by 8.4% and services sectors which grew at an avg of 12%. This is mainly supported by the revival of investments. 2. Rate of growth of the States: For year 2014-15, Maharashtra has the highest GDP and contributes to about the 14.1% of the total GDP .Tamil Nadu is at 2nd place ahead of Uttar Pradesh. It is expected that apart from these 3 states Gujarat , West Bengal and Andhra Pradesh are amongst the most economically developed state and contributed to the GDP. 3) State of Financial Market The development of the financial market smoothens the progress of financial intermediation and improves lending to economy, in turn improving the country’s economic and social welfare. The Indian financial market has been experiencing incredible progress during the last 15 years. BSE Sensex from 2000 till present. 2000 January – Value at 5375 2015 June – Value at 27800 4) Fiscal deficit: In year 2014-2015 , The fiscal deficit target was set at 4.1 per cent. However India reached 98% of it i.e. 4.0%, which it itself is good for the economy. The lower fiscal deficit reduces the government's expenditure on interest payment and unlocks...
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