Documente Academic
Documente Profesional
Documente Cultură
The proper status of any economy can be obtained from the performance of its economic
indicators. There are many macro and micro economic indicators which represent the true
picture of economic condition. These indicators plays vital role in determining the
performance of any economy. In the same way, Indian economy depends on the various
indicators which ascertain the performance of economy. The indicators of economy of India
are very important as they generate the fair status of economy of India whenever it is needed
by every party and user.
Different economic indicators are used for different purpose for any time. The indicators have
been used for analyzing the condition of Indian economy for a period and some of economic
indicators show the performance of state and a division. There are many indicators of
economy such as:
• GDP
• Inflation
• Employment status
• Capital formation
• Interest rate
• Balance of trade
The gross domestic product (GDP) is the macro-economic indicator of Indian economy
which shows the total produced output in a country. As per the purchasing power parity, the
total GDP was estimated at US $2.996 trillion in 2007 and related to exchange rate, it was
recorded around US $1.099 trillion. There has been estimated growth rate of gross domestic
product around 9 percent in 2007. The Per capita gross domestic product (GDP) according to
purchasing power parity has been recorded around US $2,600 in 2007. The agricultural sector
has shared almost 17.2% in total gross domestic product and the total share of the industrial
sector was 29.4% in overall GDP whereas the services sector has given almost 53.7% in the
GDP in 2015.
INFLATION RATE IN INDIA
The very well-known economic indicator is inflation rate. The consumer price index was
amounted at 7.8% in 2008 and according to the wholesale price index, the inflation rate was
noticed 8.75 percent.
There are various categories of indicators which show the growth and development and have
been classified on the basis of categories. There are some economic indicators have been
selected on numerous basis.
These are as follows:
• The position of economy based on the basic indicators.
• Key elements of economy
• The indicators based on plan which show the development of economy.
• The indicators related to social development.
• The economic indicators based on societal development in states.
• Various debt indicators show the growth in state governments and central
government.
• Selected indicators of fiscal issues of state governments.
• The index for measuring the performance of infrastructure sector.
• The performance of Macro-economic indicators.
• Several fiscal indicators related to the central government
• Certain economic indicators.
• The indicators of commodities market.
• Various special indicators of economy
• Various micro-economic indicators of economy.
• Certain non-economic indicators.
INDUSTRIAL GROWTH
The industrial growth is the measurement of the performance of industries. The growth rate
of industry for mining was shown as 1.0 per cent in 2008 and 2.5 per cent was related to the
manufacturing sector. The electricity sector was observed growth rate 1.6 percent. The proper
annual growth rate was more for all sectors in 2009 than previous years. The mining growth
rate was recorded 3.0 per cent in 2014 and manufacturing growth rate was almost 3.3 per cent
and 2.7 was related with the electricity sectors in economy. There has been noticed high
growth for capital goods.
This is the important source for developing the nation rapidly. The total investments made by
foreign institutional investors have been shown almost US$ 10 billion in 2014. The major
sources where the investment has come were the stock market and primary market. As per the
report generated by the Securities and Exchange Board of India, the foreign net investment
has been calculated around US$ 7.08 billion.
The foreign direct investment (FDI) plays an important role in determining the growth rate of
economy. From the last few years, the trend of inflow of FDI in India was increasing and
positive. The FDI has influenced the other sectors of economy in various manners and the
total investment inflow was US$ 3.5 billion as per the report. In 2015, the equity inflows in
FDI have been calculated like US$ 10.532 billion. Indian economy has attracted the more
foreign direct investment in other sectors.
EMPLOYMENT
The status of Employment is known through the collected data form various sources and
survey of industries and establishments. The Industries mainly consists the retailing,
manufacturing and construction. The survey includes the total numbers of hours and basis of
wages in all industries. The earnings is calculated on the basis of time spent by the workers
and number of units made by the workers.
The employed means full- and part-time workers. This also includes the contractual workers
and temporary workers. The intermittent workers are those who get the pay for the special
period. It means those employees who have gone on paid holidays or leave. This does not
include the business owners, family members and self-employed.
SOURCES OF DATA
The data for the analysis of economic indicator is collected from various sources and released
by the department of Labor's Bureau. The data is presented in the form of Labor Statistics
which is shown monthly usually within the 10 days of a month.
The department generates the vast data on various issues such as overall employment rate,
rate of unemployment and the wages of all sectors. The data related to total earnings of all
industries such as non-agriculture like government workers. The data is processed to deliver
the important information in different ways such as differences in employment and
unemployment rates based on the differences of men and women and other age group.
The measurement of any economy is done through the analysis of GDP that means the total
value of everything produced in an economy. The growth in GDP is regarded as important
indicator which shows the growth rate and compares it with the previous years. This reveals
that a healthy economy will have the GDP rate around 2-3 %. The higher growth rate will
be overheating. Whereas the low growth rate in GDP shows the danger of contraction in
economy. The GDP growth rate below zero is depicted as the condition of recession in the
economy.
Economic indicators are the criteria to measure the position of an economy. If the
performance of economic indicators is good and all indicators are moving in positive
direction, this means the economy of a country is strong. The various sectors in economy can
be measured like the retail sector and some of the indicators provide the overall condition of
economy such as unemployment and GDP depicts the complete view of economy of a nation.
There may be positive and negative impact of these indicators on the other areas of the
economy. This can be determined through the increasing and decreasing changes in the
respective areas. There are many parties and users are interested in the performances of
economic indicators as their measurements put a positive or negative impact on the value of
money means their savings and investment.
There are some basic indicators that influence the value of currency these are as interest rates
and rate of inflation. These indicators affect the whole economy as they are strong indicators
which have strong effect on various sectors of economy.
There are some widely used indicators of an economy. These predict the total output and
total production of economy. The indicators like GDP reflect the total value of goods and
services which are produced in a country in a specific period of time such as monthly or
yearly may be in quarterly.
The value of GDP and its growth is regarded as the proper and true indication of size of
economy and also the condition of economy. Whereas the GDP per capita is related to the
trends of standards of living for a period of time and the GDP growth rate is considered as the
best indicator of predicting the overall economic growth in the country. The other concepts of
GDP and various new assumptions in measurements of national income are the best changes
in development of economy during the twentieth century.
The indicators of economy are very important such as GDP growth and the national accounts.
These are considered as the measurement of true and fair picture of the overall state of the
economy. GDP estimation is useful for various users such as policymakers use it as the
condition of economy whether an economy is moving in positive direction or negative. The
requirement of economy is based on its condition like a boost in economic activities and
threat in the form of inflation and recession.
This calculation makes a base for estimating the various indicators and GDP which give
policymakers the best option to analyze the effect of variables like monetary and fiscal policy
of country which can be responsible for the economic shocks like hike in oil price, increasing
in rate of tax. The spending rate of the economy and its basic components is determined on
the basis of measurements of economic activities. The proper policies and regulations form
the strong base for reducing the threats in economy and the national accounts policies
contribute in the positive response of business cycles.
Calculations : -
The calculation of economic indicator is very important and complicated. The calculations
provide the true result which delivers the information about the particular indicator like its
trend and progress based on its analysis. The economic indicator such as GDP is calculated
on the basis of various approaches like expenditure approach, production and income
approach.
The expenditure method means the amount which is spent by the government for a period of
time and income approach reflects the total earned income by the residents of a nation. These
methods generate the same result. The production approach is based on the value-added
approach this is used to estimate the GDP of various industries.
The production method refers to the estimation of the total production of goods and services
in a country. The aim of GDP is to present the true picture of economy and maximize its
value in monetary terms.
The GDP is regarded as the total sum the output that is produced by the economy in full year.
The GDP calculation is based on various approaches and different economy generally uses
the different method for its measurement. In some developed nations, the GDP calculation is
done through the mixture of variety of approaches that define the addition of all money
earned and spent. The total value is added for the each year.
GDP is treated as the best indicator to measure the performance of economic activity. In all
types of economies over the world, GDP has become the most predictable measure of
economy which predicts the condition of economy. This shows the nature of economy
whether it is decreasing and increasing.
The measurement of GDP and other economic variable depends on the stability of economy
and availability of resources.
There are many drawbacks in the methods for calculating the GDP. These are related to its
result. These pitfalls are as follows:
o GDP is not a complete measure taken as its own.
o There are other strong variables to predict better results than GDP.
o Special attention to other variables that focus on growth and development.
o This does not tell about overall economic condition.
o GDP calculations are not related to individual economic welfare.
o The calculation of GDP is difficult and complicated in nature.
o GDP measurement ignores some important facts.
o The result of GDP does not give true view sometimes.
o GDP figures indicate the growing nature of economy. But it ignores the
population aspects of economy.
o The calculations of GDP do not give any consideration to population and other
variables.
o The output does not increase with every increase in population.
These are the various limitations of GDP measurements. Although GDP is true measure of
Indian economy but it is concerned with its complexities and difficulties in computations.
The GDP is concerned with population when it is measured on the basis of per capita. The
total output was failed in recovering the problem during the Recession.
There are many factors which affect the calculations of GDP such as the size of economy,
condition of nation, stability, nature of economy and the population. All these factors directly
influence the quantity of output produced in economy.
The issue of GDP calculations are also related to the output and this use the statistics methods
for its measurement. As compared to previous years, the changes in output of economy have
been shown on the basis of GDP measurement for all approaches.
This was significant for all the economic variables and very good for the economy. This
shows the positive response for the new methods of measurements of GDP and other
economic variables. There had been used some approaches for the calculations of economic
variables to predict the condition of economy.
Apart from that, the economic indicators help in recovering the facts and issues about the
economic functions and activities. These have a prompt effect on the other components of the
economy whether it is contraction or not.
There are many organizations doing research or economic studies to predict the data and
figures about the economic variables. There are some surveys are generally conducted by
researchers to show the well-being of economy and its people, but there are some approaches
and existing measures that were earlier the part of national accounts.
There are many techniques are used to predict the status of economic indicators. The trends
of economic indicators are generally measured on the basis of yearly and quarterly. The
analysis of economic indicator is done by analyst to provide the overall status of economic
indicators. These play vital role in determining the position of a nation.
Moreover, the calculations of economic indicators depend on the factors of economy such as
stability, condition and nature of economy.
INCOME
The income is the basic component which affects the performance of economic indicators.
The GDP is calculated as per the output and total population of a country. The level of
income in economy changes the pattern of saving and investment. The income level of the
population also affects the calculations of economic indicators.
The income is also adjusted for inflation and other indicator to predict the accurate condition
of economy. The GDP components are related to the elements of income such as disposable
income. The disposable income of population shows the spending money of people which is
obtained after some deductions in private income.
The income of household is measured with the calculations of disposable cash. The
benchmark shows the level of Household Disposable Income (RHDI) that is obtained after
the deductions such as tax and additions of various benefits.
According to various studies, this measure is considered as the relevant for examining the
economic well-being of people of a country.
The status of indicators shows that households have faced many problems due to recession in
2008. The income level has been found at very low after the recession and crisis. They have
been observed the decline in 2010. The benchmark shows the average of household income
to provide indication.
This gives various indications to distribute the wealth and scarce resources to the population.
Apart from that, there may be many changes in income level and resources due to changing
environment. The differences in the poorer and richest section have shifted as the bigger slice
on the population.
The income line depicts the average income level closely to other indicators. The analysis of
indicator suggests that changes have been distributed due to recession.
WEALTH
The wealth is also considered as the important indicator of showing the overall performance
of a nation. The wealth of household is calculated on the basis of value of some assets. The
physical assets are taken into consideration and financial assets also plays significant role in
determining the real value of wealth.
The increasing level of wealth shows that there is boom in property and other sectors related
to funds. The condition of recession generally brings down the total wealth in economy. This
generates the status of crisis. This impacts the value of physical assets and increases the
chances of crisis in economy.
There are other variables which are used for predicting the well-being of economy and its
people. The substitute of economic indicators has been supplemented on the basis of GDP.
The economic indicator highlights the pitfalls of economy and its overall performance. The
economic indicator provides the clear view and comprehensive concept of the economy. The
debate has been made on it.
The policymakers of economy watch the condition and stability of economy. There is always
a debate on these arguments such as debate is related to political issues. The cost of delaying
the debate dominates the politics.
There is more attention should be focus on special economic variables. These are marked as
the death of GDP. The performance of the measure of variables is examined by the help of
various methods.
There are the some comparisons between the economic variables. The various economies
have been compared with rivals. There will be good status of GDP in most of the developing
economies.
There are various economies which have faced the recession and it leads to the
unemployment. This situation can be examined through increasing the industrial production
which has fallen from last decades. The rate of inflation has gone up and housing sector has
started the other changes.
The claim of people claims has increased for the status of employment in economy. The
confidence of customer increased in business. The area of business has diversified to
understand the condition of economy. The nature of economy is described through the
condition of economic indicators. The idea of influencing the variables of economy can bring
the progress in role of government.
Economic Goals
There are many goals of economy which describe the objectives of economy. The economies
of the world are following goals:
1. Growth in economy
2. employment
3. stability in prices
Economic Growth
The goal of any economy is give the proper resources to people such as goods and services.
There are many resources and services which are provided to the people in economy. Apart
from that, economists examine the performance of nation through the availability of
resources and measurements of variable.
The important measure of economy showing the performance of total output is called gross
domestic product (GDP). GDP is nothing but simply the value of all goods and services
which are produced in the economy in a year. In the different economies, it is calculated by
the separate department such as Department of Commerce measure it in the U.S. GDP consist
those items and services which are produced with in country. The goods that are producing
outside the country are not included in the calculation of GDP.
There is inclusion of final goods in the measurement of GDP. These are the services and
goods which are used by the final user. Moreover, the intermediate goods are not taken into
consideration. For example, the finished goods are included and intermediate products are
excluded from the calculations.
The GDP does not predict the actual state of the economy in some cases. But the total change
in trend of GDP predicts the condition of economy. The method of calculation represents that
when value of GDP increases after deducting the rate of inflation, it means the economy is in
good position and stable. If the value of GDP decreases then the state of economy is not good
and instable.
The Business Cycle
There is strong impact of business cycles on the condition of economy and performance of its
variable and indicators which show the overall trend in economy. All these are impacted by
the business cycle such as boom, depression and recession. The business cycle refers to the
fluctuations in market due to expansion and other reasons. These are the variability which
forms the business cycle.
The business cycle is the ups and downs in economy because of expansion and contraction of
market. The period of a cycle is three to five years but it influence the whole economy last
long. These cycles are generally irregular in nature. There are basically some phases of
business cycle. These are as:
1. Prosperity
2. Recession
3. Depression
4. Recovery
• In the phase of prosperity, the condition of economy is better and growing state. The
chances of expansion of economy are high, employment is high, there is rise in income,
and consumers purchase more services and products. There is increase in the level of
production.
• The recession is the state of economy where everything slow down and decrease. In this
situation, GDP value decline, employment decline. There are slow business profits due
to low buying by the customers in lack of money to spend. This decreasing trend in
everything in economy is called a recession. The analysts say that recession occurs
when GDP decreases for last two continuous quarters.
• After the phase of recession, recovery comes where the economy finds to chances of
grow again.
• If the period of recession is more than ten years, then production is broken down and
unemployment increases at very high rate. The economy generally faces the phase of
depression.
• There are various nations which have experienced the high level of depression in earlier
years. The government of other countries has used many economic methods and tools to
cope up with the depression.
Full Employment
The economy is strong when the purchasing power of consumer is high and people have
more funds to spend on goods and services. The increasing in the expenditures such as for the
basic necessity things, personal expenses and other things can increase the value of GDP and
makes the economy more strong.
The people of country can spend only when there is condition of full employment in the
economy. The people will spend the money properly, when they earn from any organization
while working for salary and other consideration. The people mainly spend on various items
such as food, medical and clothing etc. If they will not spend on goods and services, the
capital formation will be slow and it leads to reduction in GDP value. This can make the
economy very weak. Thus, the full employment is necessary to stable the economy.
The basic aim of all economies is providing employment to everyone and creates more
opportunity for the people to earn.
In some theories, the situation of full employment is occurred when every people has a job
who is interested in earning. There are many theories have been evolved on the level of full
employment in economies and equilibrium in employment and unemployment rate. The full
employment in economy is very necessary.
In reality, the full employment level can force the people for spending more and make the
economy more stable. The GDP value can be increased by creating more opportunities for
employment in the economy.
In practice, the full employment is found where more than 95 percent of people are employed
who has interest in doing work.
The Unemployment Rate
The unemployment rate can be observed through the analysis of condition of employment in
a nation which is done by special department for example in U.S. the Department of Labor
examine the rate of unemployment and generate the report about the percentage of workers
who are unemployed and seeking the job. The unemployment rate generally measures the
position of economy and predicts its health.
The rate of unemployment generally grows during in the period of recession because the
industries are not ready to hire the worker at the time of slow demand for goods and low
services. On the other hand, the unemployment rate declines when the demand for goods and
services is high and the economy is moving in positive direction. There is need more workers
for supplying the goods.
The GDP depicts the total growth and economic production of a country which influence the
every aspects of economy including people and factors of production. Moreover, the
unemployment rate will be low and salary of workers increases when the state of economy is
stable and strong. There is more demand of labour and worker to meet the requirements of
industry and economy.
There may be many changes in GDP due to the fluctuations in the market. There are ups and
downs in the prices. These changes generally affect the stock market completely. It is
difficult to observe the change such as a weak economy will generate more losses and low
profits for industries which lead to low prices for stock.
The changes in GDP specifically the negative change creates the problems for all parties such
as investors, economists, government, business owner and other users. The investors are
concerned with the changes and GDP growth. These are the factors which ascertain the
position of an economy whether it is recession.
The stability of prices
The stability in prices determines the stable condition of economy and nation. The price
stability also affects the performance of economic indicators. The fluctuations in market
prices and other prices are always matter of concern for all the policy makers and users.
The price of goods and services depends on the demand and supply aspects of markets. The
stable price depicts the condition of market.
INTRODUCTION OF GDP
GDP is a financial value and worked of all final merchandise and services recorded during a
particular time period, which is generally a yearly, or quarterly. Generally, GDP value helps
to estimate the economic performance of any country and to form international comparisons
within different countries. Further GDP value do not indicate variations within standard of
living and inflation rate of any country. Economic activity is not entirely calculated by GDP.
It consist of final output or price which are added at every stage of production. It do not
include business to business transactions within all stages of production.
GDP are generally determined in three ways, all of that ought to, in essence, provide identical
result. These are the three ways production approach, income approach and expenditure
approach. The most direct method among these three is the production approach that sums
the outputs of each category of enterprise to make the entire. On the other hand the
expenditure approach works on the principle that every one of the Corporation should be
bought by someone, so the entire worth should be adequate to people’s total expenditure in
the shopping. And lastly for the income approach which was worked on that production of
income factors should be adequate with worth of various services and product and fixed the
GDP with calculating the total of all producers’ income.
GDP per capita is calculated by output per unit of labour by input. The percentage of the
working age population and the ratio of age population that was working to the population is
known as GDP per capita output. There are some factors which determine minds the per
capita GDP growth. These factors include productivity, demographic changes factors and
some other factors like capital factor and new product and services factors.
The growth of Indian economy in context of GDP shows different brands in pre-WTO and
post WTO era. The economic growth within different nations which was went to the various
steps which was affecting the development and changes the labor rate and participation and
therefore the basic sizes of the sectors of economy. In India introduction of the WTO directly
affect the GDP of our country.
HISTORY
The basic concept of GDP was introduced by William Petty and it was used to defend local
landlords against unfair taxation during warfare between the and English. This method was
further developed by Charles Devenant. The modern concept of GDP was developed by
Simon Kuznets and in this he mentioned its use as a measure of welfare. GDP become the
main pool for measuring a country’s economy after Barrett and Woods conference in 1944.
At that time lost national product was used to estimate the growth of any country which was
obviously different from GDP which is measured production by the country’s citizens at
home and abroad which is totally different from GNP as it considers resident institutional
units.
In the GDP concept the value added by the firms is easy to calculate from their logged
accounts but when public sector, financial industry and intangible asset adds value, its
calculation is rather complex. These activities are gradually getting more importance in
developed economies, and that international conventions governing the estimation, their
inclusion or exclusion in GDP constantly change in an attempt to compete with industrial
advances.
DETERMINING GDP
Generally, any country’s GDP can be determined by three different ways, and all of the three
should, as far principle, give the same results. Three different ways are mentioned below:
1. The production approach
2. The income approach
3. The expenditure approach
The more direct method among the above three is the production approach method, which
adds the outputs of every class of enterprise to reach at the total. Secondly, the expenditure
approach is based upon the principle that all of the product must be bought by somebody, so
the value of the total product must be equivalent to people’s total expenditures in the market
in buying things. And lastly, the income approach works on the principle that the income of
the productive factors must be same to the value of their products and it calculates GDP by
finding the sum of all producer’s incomes.
PRODUCTION APPROACH
INCOME APPROACH
Income approach is another way to calculate GDP Using the sum of primary incomes
distributed by resident products units. Calculation of GDP is done through this way then
sometimes it is called gross domestic income. GDI should provide the exact same amount as
the expenditure method. However, measurement errors will make to figure is slightly off
when imported by National’s statistical agencies.
According to a study the composition of GDP based on sector wise classification in 2014 has
been shown as follows: the Agriculture sector was accounted at 17.9% the Industry was
recorded at 24.2% and the Services sector was calculated at 57.9%. The agriculture sector’s
production was reached at $366.92 billion. India has become the 2nd bigger producer of the
agriculture items. The total output for agriculture sector in India accounted around 7.68%.
Industry sector’s GDP is recorded at $495.62 billion and the rank was 12 all over the world.
India rank is estimated 11 over the world in service sector and GDP was at $1185.79 billion.
In Indian economy, the agriculture Contribution was bigger than the average of 6.1%. The
total Contribution made by the Industry and Services sector was less than 30.5% for Industry
sector and 63.5% for Services sector.
Table 3.1: Sector Wise GDP Contribution (2014-2015)
Sectors Percentage share
Agriculture sector 16.11
Industry sector 31.37
Services sector 52.52
Source: Economic survey of India (2014-15)
India is at present ninth largest economy of the world. India is at third position after China
and Japan among Asian countries. India possess 8.00% of total Asia's GDP (nominal). It was
calculated that in 2015, India will be seventh biggest economy of the world with nominal
GDP of $2,308. According to IMF World Economic Outlook (April-2015), “GDP growth
rate of India in 2014 is 7.168% and India is 15th fastest nation of the world”. Average growth
rate from 1980 to 2014 was accounted at 6.23%, very high at 10.26% in 2010 and a record
low of 1.06% in the 1991.
The 2004-05 was taken base year to analyse the growth performance of GDP. The
performance of GDP has been analysed in different categories:
(1) Trends of GDP at current price and constant price in pre-WTO and post- WTO
regime.
(2) Performance of GDP growth rate at current price during pre-WTO and post-WTO.
(3) Performance of GDP per capita and per capita growth rate at current price during Pre
and post WTO.
(4) Analysis of Sector wise contribution of GDP and sector wise GDP growth in Pre and
post WTO.
(5) Comparison of GDP growth rate in Pre and post WTO.
TREND OF GDP (AT CURRENT PRICES) IN PRE WTO (1975-76 TO 1994-95) BASE
YEAR: 2004-05
Table 3.2: TREND OF GDP (At Current Prices) IN PRE WTO (1975-76 to 1994-95)
Base Year: 2004-05 (Rupees Billion)
10000
8000
6000
4000
2000
120000
100000
80000
60000
40000
20000
Interpretation: The graph shows the increasing trend of GDP at factor cost and GDP at
market price from 1995 to 2015. The maximum value of GDP was observed in 2014-15 out
of twenty years of Post- WTO. The GDP value at market price is more than value of GDP at
factor cost.
TREND OF GDP (AT CONSTANT PRICES) IN PRE WTO, BASE YEAR: 2004-05
Table 3.4: TREND OF GDP (At Constant Prices) IN PRE WTO, Base Year: 2004-05
(Rupees Billion)
FINANCIAL YEAR GDP At Factor Cost GDP At Market Price
1975-76 6846 7430
1976-77 6931 7554
1977-78 7449 8102
1978-79 7859 8565
1979-80 7450 8116
1980-81 7985 8663
1981-82 8434 9183
1982-83 8680 9502
1983-84 9362 10195
1984-85 9733 10585
1985-86 10138 11141
1986-87 10576 11673
1987-88 10949 12136
1988-89 12062 13304
1989-90 12802 14096
1990-91 13478 14876
1991-92 13671 15033
1992-93 14405 15857
1993-94 15223 16610
1994-95 16196 17717
Source: central statistics office
Figure 3.4: TREND OF GDP (At Constant Prices) IN PRE WTO, Base Year: 2004-05
TREND OF GDP (AT CONSTANT PRICES) IN PRE WTO
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
Table: 3.5: TREND OF GDP (AT CONSTANT PRICE) IN POST WTO (RUPEES
BILLION)
FINANCIAL YEAR GDP at Factor Cost GDP at Market Price
1995-96 17377 19058
1996-97 18763 20497
1997-98 19570 21327
1998-99 20878 22646
1999-00 22549 24650
2000-01 23484 25597
2001-02 24749 26831
2002-03 25709 27852
2003-04 27757 30041
2004-05 29714 32422
2005-06 32530 35432
2006-07 35643 38714
2007-08 38966 42509
2008-09 41586 44163
2009-10 45160 47908
2010-11 49185 52823
2011-12 52475 56330
2012-13 54821 58998
2013-14 57417 61958
2014-15 96962 106439
Source: central statistics office
120000
100000
80000
60000
40000
20000
Table 3.6: GDP at Factor at Constant and Current prices Cost at 2004-05 base Prices In
Pre-WTO (Rupees billion)
Table 3.7: GDP at Factor at Constant and Current prices Cost at 2004-05 base Prices
(Rupees billion)
FINANCIAL GDP At Factor Cost At Current GDP At Factor Cost At
YEAR Price Constant Price
1995-96 11185 17377
1996-97 13017 18763
1997-98 14476 19570
1998-99 16687 20878
1999-00 18582 22549
2000-01 20007 23484
2001-02 21752 24749
2002-03 23438 25709
2003-04 26258 27757
2004-05 29714 29714
2005-06 33905 32530
2006-07 39532 35643
2007-08 45820 38966
2008-09 53035 41586
2009-10 61089 45160
2010-11 72488 49185
2011-12 83916 52475
2012-13 93888 54821
2013-14 104728 57417
2014-15 106439 96962
Source: central statistics office
Figure 3.7: GDP by Industry of Origin at Factor Cost & at 2004-05 Prices at Post-
WTO
Table 3.8: GDP at market price at Constant and Current prices & at 2004-05 Prices In
Pre-WTO (Rupees billion)
FINANCIAL GDP At Market Price GDP At Market Price
YEAR At Current Price At Constant Price
1975-76 867 7430
Table 3.9: GDP at market price at Constant and Current prices & at 2004-05 Prices
(Rupees billion)
FINANCIAL YEAR GDP at Market price at constant GDP at market
price price
During the pre-WTO, the maximum value of GDP at current price and constant price also
was observed in 1994-1995. But in post-WTO period the highest value of GDP was seen in
2014-15. The value of GDP has grown in 2005, reached at 106439 and 125412 factor cost
and market price respectively as compared to 1995 earlier it was 9553 and 10455
respectively. Indian economy has swelled by 3.52 times more in past 10 years at current
price.
Table 3.10: PERFORMANCE OF GDP GROWTH RATE (at current price) IN PRE-
WTO
FINANCIAL YEAR GDP Growth Rate (%)
1975-76 6.21
1976-77 7.49
1977-78 14.13
1978-79 7.47
1979-80 9.12
1980-81 19.51
1981-82 17.08
1982-83 11.72
1983-84 16.97
1984-85 12.3
1985-86 11.74
1986-87 11.5
1987-88 13.36
1988-89 19.34
1989-90 15.2
1990-91 16.49
1991-92 15.37
1992-93 14.7
1993-94 16.23
1994-95 16.8
19.51 19.34
17.08 16.97 16.49 16.23 16.8
15.2 15.37 14.7
14.13
13.36
11.72 12.3 11.74
11.5
9.12
7.49 7.47
6.21
Interpretation: The graph shows the both increasing and decreasing rate of Gross Domestic
Product (GDP) growth of India at current prices in Pre-WTO era. GDP growth rate was
declined in following years 1978, 1981, 1982, 1985, 1986, 1987, 1990, 1991, 1992. Growth
rate of GDP was observed maximum in 1980 positions at 19.51%, and recorded low of 6.2%
in the 1975-76.
1995-96 17.08
1996-97 16.38
1997-98 11.2
1998-99 15.28
1999-00 11.35
2000-01 7.67
2001-02 8.72
2002-03 7.75
2003-04 12.03
2004-05 13.16
2005-06 14.1
2006-07 16.6
2007-08 15.91
2008-09 15.75
2009-10 15.18
2010-11 18.66
2011-12 15.77
2012-13 11.88
2013-14 11.54
2014-15 13.26
Source: central statistics office
Figure 3.11: GDP GROWTH RATE at current price in post-WTO
GDP GROWTH RATE AT CURRENT P RICE IN P OST- WTO
18.66
17.08 16.6
16.38 15.91 15.75
15.28 15.77
15.18
14.1
13.16 13.26
12.03 11.88 11.54
11.2 11.35
8.72
7.67 7.75
During pre-WTO, the maximum growth rate of GDP at current price was observed in 1980
stands at 19.51%, But during post-WTO the highest growth rate of GDP was seen in 2010.
The growth rate of GDP was recorded at low in 1975 and 2000 (6.2%, 7.6% respectively).
The maximum growth rate of GDP was found in pre-WTO era as compared to post-WTO.
12,000
10,000
8,000
6,000
4,000
2,000
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Table 3.14: PRE- WTO GDP PER CAPITA GROWTH RATE AT CURRENT PRICE
FINANCIAL YEAR Per Capita Growth Rate (%)
1975-76 4.2
1976-77 5.5
1977-78 11.3
1978-79 5.9
1979-80 6.4
1980-81 16.8
1981-82 14.7
1982-83 8.6
1983-84 14.4
1984-85 9.1
1985-86 9.9
1986-87 9.4
1987-88 10.7
1988-89 15.9
1989-90 12.2
1990-91 14.3
1991-92 11.6
1992-93 12.8
1993-94 13
1994-95 15.2
Source: Economic survey of India 2014-2015
Figure 3.14: PRE- WTO GDP PER CAPITA GROWTH RATE AT CURRENT PRICE
1995-96 15.3
1996-97 13.8
1997-98 8.6
1998-99 12.8
1999-00 10.1
2000-01 5.1
2001-02 6
2002-03 6.3
2003-04 10.4
2004-05 12
2005-06 12.2
2006-07 14.7
2007-08 15
2008-09 10.7
2009-10 13.3
2010-11 18.5
2011-12 14.5
2012-13 11.7
2013-14 12.1
2014-15 9.1
50
40
30
20
10
0
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
Interpretation: The graph shows the sector-wise contribution of GDP during post-WTO.
The six sectors were taken in the study to find out the total share of these sectors in GDP. The
service sector was observed as the major contributor of GDP. In 2013, the service sector
share was 57.03 as it was more than half part of total share. After service sector, agriculture
& allied sector and industry was on the same status. The lowest share was observed in mining
& quarrying. The manufacturing sector also played significant role in contributing GDP.
In twenty years of Pre-WTO, the major sector wise contribution of GDP was found in service
sector. India registered highest rate in service sector. After service sector, agriculture and
allied sector were also the major contributors of GDP. All the given six sectors of economy
were growing rapidly during pre-WTO era. But, agriculture sector was showing a decreasing
trend. The mining & quarrying sector had a slight contribution in GDP during pre-WTO
followed by manufacturing sector. The highest GDP share was seen in 1993 by service
sector out of 20 years of Pre-WTO GDP data. During post-WTO the major contribution of
GDP was from the service sector. In 2013, the share of service sector was 57.03 as it was
more than half part of total share. As compared to Pre-WTO, the contribution of all six
sectors was increased rapidly in Post-WTO era.
During the pre-WTO years, the sector-wise GDP growth of Indian economy was recorded
negative and very low in some sectors. But after 1980 all these six sectors of economy had
grown very quickly. A sharp increasing in growth was observed in manufacturing sector and
mining & quarrying.
In the twenty years of Post-WTO and after adopting the policies of world trade organization,
an increasing growth of GDP was found in some sectors but in few sectors like mining &
quarrying the growth rate was negative in 2014 due to some economic reasons.