Breaking News

Growth and Development : (About Indian Economy Growth Rate & Statistics)

June 14, 2019
Dear Readers, The upcoming important exams are NABARD Grade-A and Grade-B, in which there is a section of Economic and Social Issues. So, for the same, it becomes really important to have an in-depth knowledge of the various important topics given in the syllabus. To help you with this our experts today are providing you with all the necessary information related to the mentioned field which will help you to fetch some good marks. 

The topics we are covering in this post are Chapter - Growth and Development (About Indian Economy Growth Rate and Statistics). These notes would be very useful, so we request you to read it before you appear for the exam.

Growth and Development 
(About Indian Economy Growth Rate & Statistics)


Introduction

The two words ‘growth’ and ‘development’ were often used interchangeably in economic discussion. As soon as ‘development eco­nomics’ emerged as a distinct field of study after the World War II, it ‘had the appearance of being a bastard child of growth economics’ and, in fact, this child did not differ from what could be expected from a genuine ‘son of growth economics’. But, technically speak­ing, they are not the same.

Economic growth is defined in positive terms. It is measured by the sustained increase in real, national or per capita income of a nation over time. Economic growth is usually measured in terms of an increase in real GNP or GDP over time or an increase in income per head over time. Growth is desirable as it ena­bles a society to consume more goods and services.

That is why growth is considered to be the basis of advancing real living standards or human welfare. At the same time, it is also true that growth does not necessarily lead to an increase in human welfare. Economic de­velopment is more fundamental than eco­nomic growth. 

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships.

Market size-

India’s GDP is estimated to have increased by 7.2 percent in 2017-18 and 7 percent in 2018-19. India has retained its position as the third largest startup base in the world with over 4,750 technology start-ups.

India's labour force is expected to touch 160-170 million by 2020, based on the rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

India's foreign exchange reserves were US$ 405.64 billion in the week up to March 15, 2019, according to data from the RBI.

Recent Developments-

With the improvement in the economic scenario, there have been various investments in various sectors of the economy. The M&A activity in India reached record US$ 129.4 billion in 2018 while private equity (PE) and venture capital (VC) investments reached US$ 20.5 billion. Some of the important recent developments in the Indian economy are as follows:

  • During 2018-19 (up to February 2019), merchandise exports from India have increased 8.85 percent year-on-year to US$ 298.47 billion, while services exports have grown 8.54 percent year-on-year to US$ 185.51 billion.
  • Nikkei India Manufacturing Purchasing Managers’ Index (PMI) reached a 14-month high in February 2019 and stood at 54.3.
  • Net direct tax collection for 2018-19 had crossed Rs 10 trillion (US$ 144.57 billion) by March 16, 2019, while goods and services tax (GST) collection stood at Rs 10.70 trillion (US$ 154.69 billion) as of February 2019.
  • Proceeds through Initial Public Offers (IPO) in India reached US$ 5.5 billion in 2018 and US$ 0.9 billion in Q1 2018-19.
  • India's Foreign Direct Investment (FDI) equity inflows reached US$ 409.15 billion between April 2000 and December 2018, with maximum contribution from services, computer software, and hardware, telecommunications, construction, trading, and automobiles.
  • India's Index of Industrial Production (IIP) rose 4.4 percent year-on-year in 2018-19 (up to January 2019).
  • Consumer Price Index (CPI) inflation stood at 2.57 percent in February 2019.
  • Net employment generation in the country reached a 17-month high in January 2019.
Government Initiatives-

The interim Union Budget for 2019-20 was announced by Mr. Piyush Goyal, Union Minister for Finance, Corporate Affairs, Railways and Coal, Government of India, in Parliament on February 01, 2019. It focuses on supporting the needy farmers, economically less privileged, workers in the unorganized sector and salaried employees while continuing the Government of India’s push towards better physical and social infrastructure.

Total expenditure for 2019-20 is budgeted at Rs 2,784,200 crore (US$ 391.53 billion), an increase of 13.30 percent from 2018-19 (revised estimates).

Numerous foreign companies are setting up their facilities in India on account of various government initiatives like Make in India and Digital India. Mr. Narendra Modi, Prime Minister of India, has launched the Make in India initiative with an aim to boost the manufacturing sector of Indian economy, to increase the purchasing power of an average Indian consumer, which would further boost demand, and hence spur development, in addition to benefiting investors. The Government of India, under the Make in India initiative, is trying to give a boost to the contribution made by the manufacturing sector and aims to take it up to 25 percent of the GDP from the current 17 percent. Besides, the Government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally and to increase digital literacy.

Some of the recent initiatives and developments were undertaken by the government are listed below:

  • In February 2019, the Government of India approved the National Policy on Software Products – 2019, to develop the country as a software hub.

  • The National Mineral Policy 2019, National Electronics Policy 2019 and Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME II) have also been approved by the Government of India in 2019.

  • Village electrification in India was completed in April 2018. Universal household electrification is expected to be achieved by March 2019 end.

  • The Government of India released the maiden Agriculture Export Policy, 2018 which seeks to double agricultural exports from the country to US$ 60 billion by 2022.

  • Around 1.29 million houses have been constructed up to December 24, 2018, under Government of India’s housing scheme named Pradhan Mantri Awas Yojana (Urban).

  • Prime Minister's Employment Generation Programme (PMEGP) will be continued with an outlay of Rs 5,500 crore (US$ 755.36 million) for three years from 2017-18 to 2019-20, according to the Cabinet Committee on Economic Affairs (CCEA).

Road Ahead- 

  • India's gross domestic product (GDP) is expected to reach US$ 6 trillion by Financial Year 2027 and achieve upper-middle income status on the back of digitisation, globalization, favourable demographics, and reforms.

  • India's revenue receipts are estimated to touch Rs 28-30 trillion (US$ 385-412 billion) by 2019, owing to Government of India's measures to strengthen infrastructure and reforms like demonetization and Goods and Services Tax (GST).

  • India is also focusing on renewable sources to generate energy. It is planning to achieve 40 percent of its energy from non-fossil sources by 2030 which is currently 30 percent and also have plans to increase its renewable energy capacity from to 175 GW by 2022.

  • India is expected to be the third largest consumer economy as its consumption may triple to US$ 4 trillion by 2025, owing to shift in consumer behaviour and expenditure pattern, according to a Boston Consulting Group (BCG) report; and is estimated to surpass USA to become the second largest economy in terms of purchasing power parity (PPP) by the year 2040, according to a report by PricewaterhouseCoopers.

Exchange Rate Used: 1 United States Dollar equals to 69.46 Indian Rupee (as on 11th June 2019)

No comments

Subscribe to: Post Comments ( Atom )