Economy of India | India China economy comparison |GDP of India |India globalization |Indian economic sector |Economic indicators
Definition of GDP - Gross Domestic Product or GDP as it is more commonly known is the total market value of all final goods and services produced in the country in a given year. This can alternatively be expressed as total consumer investment and government spending added to the total value of exports minus the value of imports.
The economy of India is the twelfth largest in the world. Post-independence, India started experiencing rapid economic growth from the 1990’s. And then in the 21st century, India emerged among as one of the leading economies of the world with its optimum exploitation of human and natural resources and its huge talented human knowledge base. By 2008, India had established itself as the second fastest growing major economy. India had crossed the trillion dollar mark. In 2009, however, India has seen a significant slow down in its GDP of 6.1% and a large projected fiscal deficit of 10.3% of GDP that was considered among the highest in the world.
The country’s service sector accounts for 54% of the GDP of India, industrial sector is in the second position with 29% followed by agricultural sector with 17%. Service sector therefore contributes more than half of the India’s GDP. Previously, agriculture was the main player, contributing maximum to the GDP of India. But after the government of India had taken steps to implement FDI policies, SEZs and NRI investments the focus shifted the service sector. In 2006, remittances from overseas Indian migrants were a whopping $27 billion and that contributed to about 3% of the GDP of India.
It has been optimistically projected that measured in the current prices, the GDP of India may overtake that of France and Italy by 2020, Russia, Germany and UK by 2025 and even Japan by 2035. The growth story of the GDP of India has been successful by the following several industrial sectors of the country, namely, information technology and IT enabled services, telecommunications, electronics and hardware, automobiles, pharmaceuticals and biotechnology, textiles, retail, construction, retail, airlines, power, hospitality, fertilizers and chemical and oil and natural gas.
Unfortunately, even after its progressive steps, the GDP of India has seen a definite set back after the global financial crisis over the past two fiscals, 2008-09 and 2009-10. Some signs that India’s GDP has fallen and that India’s economy has been affected and by the global economic slowdown are that the spending power of consumers have declined considerably over the past two years, interest rates have spiraled, investments have gone down.
Skepticism is in the air as far as India’s current performance is considered. Effectively countering the economic recession has been the focus of India during the initial phase of the slowdown. Now the country needs a gradual and steady progress at this hour, as far as GDP growth rate is considered.