Posted on: 29-04-04 11:20:07
This shows how Indians are doing ......
Tuesday, 20 January , 2004, 18:35
Merrill Lynch today announced that India would have an estimated GDP growth rate of 8 per cent for the current fiscal year ended March 2004 as against the previous estimated growth rate of 7.3 per cent.
The rise in the growth rate would mostly be derived from 9.6 per cent growth in services and manufacturing sectors.
While all sectors would benefit from a strong growth, power, retailing, telecom, cement, capital goods, autos and financial sectors are likely to be at the forefront, said economist Rajeev Varma.
Expecting a turnaround in the investment cycle in the coming year (2004-05), Varma said, Infrastructure spending to the tune of $76-billion between 2004 and 2007, would be the key driver of the investment cycle which is 62 per cent higher spending in the last three years.
Total investment spending is likely to rise by 60 per cent to $208-billion by the year 2007 of which about 20-25 per cent would come through foreign direct investments (FDI) into the country.
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An analysis of India's Gross Domestic Product (GDP)
Highlights
India's GDP during fiscal 1999-2000 is expected to grow by 5.9 per cent at fixed prices compared to 6.8 per cent in 1998-99. Thus the expected GDP for 1999-2000 is Rs. 11,45,436 crores while that in 1998-99 was Rs. 10,81,834 crores (1 crore = 10 million). The base year for these figures is 1993-94.
At current prices, the GDP is expected to grow by 9.6 per cent in 1999-200. Also known as GDP at factor cost, the gross figure for 1999-2000 is expected to be Rs. 15,69,868 crores compared to the 1998-99 figure of Rs. 14,31,527 crores.
The slowdown in 1999-2000 is due to a decline in the agricultural sector which has recorded a mere 0.8 per cent growth in 1999-2000 compared to the robust 7.2 per cent in 1998-99.
Despite the paltry growth in the agricultural sector, the GDP is yet expected to grow by 5.9 per cent – thanks to a 7 per cent growth expected in the manufacturing sector.
Despite the year-on-year differences mentioned above, the fact is that the Indian economy is growing faster than ever before. Between 1992-93 and 1997-98, India's GDP at 1980-81 prices has recorded a trend growth rate of 6.9 per cent compared to 5.5 per cent through the decade of the 1980s (i.e. 1980-81 to 1990-91). Never once has the growth rate fallen below 5 per cent since 1991-92 when it grew by only 1 per cent and when the economic liberalisation process started.
The reason why GDP growth has remained strong since 1991-92 is that the contribution of non-agricultural sectors has considerably increased. This has enabled the economy to withstand sharp declines in the agricultural sector and yet register good overall growth. For example: in 1995-96, agricultural output rose by a negligible 0.2 per cent, yet India registered its most impressive GDP growth ever: 8.6 per cent.
Throughout the 1990s, i.e. from 1990-91 to 1998-99, agriculture's share in the GDP has fallen by 4.10 per cent from 30.93 per cent to 26.83 per cent.
The declining role of the agricultural sector in the Indian economy is the most noteworthy development. In the 1980s and earlier, fortunes in the agricultural sector used to determine the GDP growth rate as is typical of the less developed economies. With the increasing contribution of the non-agricultural sectors, the Indian economy is arguably undergoing a structural shift towards the fundamentals of a developed economy (in the developed economies, the industrial and service sectors contribute a major share in GDP while agriculture accounts for a relatively lower share).
Of the non-agricultural sectors, it is the service sector that has shown maximum growth and has gained at the expense of both the agricultural and industrial sectors. The service sector's share in GDP has grown from 43.69 per cent in 1990-91 to 51.16 per cent in 1998-99. In contrast, the industrial sector's share in GDP has declined from 25.38 per cent to 22.01 per cent in 1990-91 and 1998-99 respectively. The agricultural sector's share too has fallen as mentioned above.
Some economists caution that if the service sector bypasses the industrial sector, economic growth can be distorted. It is true that, in India, the service sector's contribution in GDP has sharply risen and that of industry has fallen (as shown above). But, there are other economists who argue that India's service has grown NOT BECAUSE the industrial sector has slowed down. Rather, they say, India's industrial sector has indeed grown steadily (except in 1998-99) and three times between 1993-94 and 1998-99, industry surpassed the growth rate of GDP. Thus, the service sector has grown at a higher rate than industry though industry too has grown. The rise of the service sector therefore does not distort the economy..
The fact that the service sector now accounts for more than half the GDP probably marks a watershed in the evolution of the Indian economy. See report on service sector.
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Thanks and regards.
Biomed
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"Change before you have to" : Jack Welch
Good article biomed.... it is great to see india making big strides and the future belong to india if our leaders stay honest.
Too many of these financial experts hype up the fad of the time ...these days it is india and china . I do feel great pride in reading positive articles about india but one muxt not forget that a few affluent urban centers is not complete india .... progress is being made but we have ways to go to be able to come at par with the rest of developed world ....
just making slogans of india shining does not really make india shine when 20% people remain undernourished without clean drinking water.
even one percent is too many 20% is is more than six times the population of canada.
See it for yourself in this UNDP report.
http://hdr.undp.org/reports/global/2003/pdf/hdr03_MDG_tables.pdf
Hope that day comes soon when we could compare india and Canada at par .
We are not there yet...that is why i came out of india and probably you did too and so did many of those in this forum.
I dream of the day when my village in india gets even half the facilites of canadian villages ... it will surely happen one day i hope during my lifetime ... but it is not happenning yet .
This post is not an analysis of and a financial expert.... this is coming from a indian by heart and soul who cannot forget his roots .
Jai hind
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What can be imagined, can be achieved.
I don't want to say anything abt this topic. But just want to say congratulation Biomed to become a moderator
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Visit-
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Quote:
Orginally posted by Mishtar India
just making slogans of india shining does not really make india shine when 20% people remain undernourished without clean drinking water.
even one percent is too many 20% is is more than six times the population of canada.
Thanks for the nice reply MI. If you remember I posted some details about poverty in Canada.. if I am not wrong poverty rate in Canada is 16% and in India it is 20% ( as you mentioned).. not a big difference... specially when you consider huge gap between income per capita.
Have you seen rural Canada MI? I am fortunate enough to see most part of rural Ontario at least..rural Ontario is the contrast of what we see in urban Ontario. In most of rural Ontario and Quebec to see a Doctor sometime you are forced to drive 100-150kms ( in some cases the nearest hospital is 1-1.5 hour flying time away. There is no electricity and water in many areas. And roads ... God help those who live in Rural areas... because lot of villages are not connected with the road network.
I just want to say that in Canada also there is a huge difference between urban and rural areas.
Jyoti, thanks a lot...
Thanks and regards.
Biomed
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"Change before you have to" : Jack Welch
Quote:
Orginally posted by biomed
.. if I am not wrong poverty rate in Canada is 16% and in India it is 20% ( as you mentioned).. not a big difference... specially when you consider huge gap between income per capita.
Biomed, just a small correction in your post....the 20% figure i mention is not poverty rate of india ....it is the percentage of people who are "undernourished and under extreme poverty"... the corresponding % for Canada is 0%. ( please see the UN report it linked earlier)
Even if we compare the number below poverty line :
if you say it is 16% for Canada ( approx 4.5Million people) ... the % below poverty line in India is 35% ( about 350 million people) .
Thats a difference of 345million people...about 10 times the population of Canada . in other words about 5% of human race lives below poverty line in india.
if you have time read this article
http://www.imf.org/external/pubs/nft/2001/crossrds/
our literacy rate is 52%..... Canada is 97% ....and we can go on and on in comparing but that is not the point.
i feel it will take decades of such 8% growths till we can compare Canada and india on same level even on % levels ...let alone on actual numbers of people below poverty.
India has a long way to go and hope it stay the course And I really hope I get to see that day in my lifetime.
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What can be imagined, can be achieved.
Quote:
Orginally posted by biomed
There is no electricity and water in many areas. And roads ... God help those who live in Rural areas... because lot of villages are not connected with the road network.
I just want to say that in Canada also there is a huge difference between urban and rural areas.
Biomed
Bio, This is honestly a revelation to me. Since you say there are many villages like these, could you please name 5 in Ontario that don't have water and electricity? I'm really really curious.
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Are you there?
As far as water and electricity is concern I talked about areas not villages. And to see such areas you won't have to go very far... Between Orillia and Sudbury you can find many such areas. There are quite a lot pockets of (kind of) small villages with 10-15 ( or may be lil more) or so houses. Still these people use well water and Gas and wood.
During my next trip to that area I can arrange some names for you, if you want. Thats not a problem at all
Thanks and regards.
Biomed
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"Change before you have to" : Jack Welch
