As per the data released by the National Statistical Office(NSO), India’s GDP grew at 4.5% in the 2nd qtr of the current financial year (2019-20). This GDP growth rate is the lowest since 2013. So, we worked on how to crack it.
First of all what’s GDP?
Gross Domestic Product(GDP) is the total monetary value of all the finished goods and services produced within a country’s borders in a specific period. In India NSO, which works under the Ministry of Statistics and Programme Implementation, analyses the data and declares the growth rates Each qtr data is released within 2 months from the end of the relevant qtr. Like Qtr July-Sept data released by November end.
How it is calculated?
- Production Method = The monetary value of all products and services produced will give the country’s GDP.
- Income Method = The sum total of earnings of the people and the income of Industry, Govt. would give the GDP of the country.
- Expenditure Method = The sum total of spending made by the Government, Industry and total consumption would give the GDP of the country
GDP may be real or nominal. Real GDP is calculated after adjusting inflation and Nominal GDP is calculated at current prices.
What’s the Reason for Slow GDP growth in India?
The Indian economy is mainly driven by consumption and less dependent on exports. Hence, the prime reason for slow growth is reduced consumption expenditure, because if consumption reduces, sales reduce, leading to price reduction which compels reduced production and thereby employment reduces and this vicious cycle brings the slowdown. A slowdown in the automobile sector, increasing NPAs of banks, liquidity problems due to higher GST, are some of the reasons for this. And the secondary reason is reduced exports due to global reasons like a trade war between US-China.
The Eye-Opener: India, in spite of being an agricultural country, has to import onion!
Then What will drive the growth?
the Starterr View
Even if Reserve Bank Of India infuses funds to stabilize and encourage the Indian economy. Robust technical-economic growth can not be achieved without the Innovation, Investment and involvement and efforts of the Young.
Innovating new products, investment in infrastructure, the involvement of young people to make “Make In India” Success. Encouragement and investment in startups dealing with environmental protection or eco-friendly products, social enterprises are essential
And India being an agricultural country, favorable government policies to support farmers, to increase faith in the sector is very important.
Strong growth of the agriculture sector, innovation, and involvement of the young is must for Indian GDP to grow fast.
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