4. What is GDP?
“The total market value of all final goods
and services produced during a given time
period within a nation’s domestic
borders”
5. What is GDP?
“The total market value of all final goods
and services produced during a given time
period within a nation’s domestic
borders”
Quarterly / Annually
6. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
7. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
Represents all purchases of
goods and services made by
households (65-70%)
8. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
Costs of building factories /
homes / regular business
expenses / increase or decrease in
business inventories
9. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
Expenses on things like national
defence, operational expenses.
10. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
Goods and services that are
produced within out borders but
sold in other countries. Money
flows into our economy, exports
add to our GDP
11. GDP =
Consumption (C) +
Investment (I) +
Government Spending +
(Exports - Imports)
Components of GDP
Or NET EXPORTS
Produced in our country and sold
outside our country, money flows
out, imports are hence
subtracted from GDP
12. A: owns
$5.00
B: owns
$5.00
A: produces
$10.00
Example:
• Assume that in 2013, a country called
A produced only one piece of
calculator priced at $10.00. To
produce this calculator, country A
used $5.00 worth of factors of
production owned by citizens of
country A and $5.00 worth of factors
of production owned by citizens of
country B.
13. Answer
• GDP of countryA was $10.00
Because it produced in its own country a good worth $10.00. It does not really
matter who owned the factors of production in producing the calculator.
• GNI of countryA was $5.00
16. History of Indian Economy
The History of Indian Economy can be broadly divided into three phases:
• British Era (1793–1947)
• Pre-liberalization period (1947–1992)
• Post-liberalization period (since 1991)
17. British Era (1793–1947)
Estimated per capita GDP of India and United Kingdom from
1700 to 1950, inflation adjusted to 1990 US$. Other estimates
suggest a similar stagnation in India's per capita GDP and
income during the colonial era.
18. Pre-liberalization period (1947–1992)
• Indian economic policy after independence was influenced by the colonial
experience, which was seen by Indian leaders as exploitative.
• In the late 1970s, the government led by Morarji Desai eased restrictions on
capacity expansion for incumbent companies, removed price controls,
reduced corporate taxes and promoted the creation of small-scale
industries in large numbers
19. Post-liberalization period (since 1991)
• Prime Minister Narasimha Rao, along with his finance minister Dr. Manmohan Singh, initiated the economic
liberalization of 1991
• By the turn of the 21st century, India had progressed towards a free-market economy
• India enjoyed high growth rates for a period from 2003 to 2007 with growth averaging 9% during this period
20. Changes in the last few years(2010-2013)
INFLATION
• Inflation means a rise in the rise in the general level of prices
• Against 72 commodities, accounting for a weight of 13.8 per cent reporting
inflation the number declined to 29 commodities with a weight of 5.5 per cent
• Inflation has remained muted in the 2013 financial year and declined to a three
year low of 6.62 per cent in January 2013
21. Employment
• Overall employment in India rose by 6.94 lakh says Economic Survey 2013
• Employment rises because of the development done in the economy by
the infrastructure, FDI
22. GDPTrend of the country
The Gross Domestic Product (GDP) in India was worth 2066.90 billion US dollars in 2014.The GDP value
of India represents 3.33 percent of the world economy. GDP in India averaged 550.27 USD Billion from
1970 until 2014, reaching an all time high of 2066.90 USD Billion in 2014 and a record low of 63.50 USD
Billion in 1970.
24. The Present Scenario
• The Economy of India is the seventh-largest in the world by nominal GDP
• The country is classified as a newly industrialized country, one of the G-20
major economies.
• India is member of BRICS and a developing economy with an average
growth rate of approximately 7% over the last two decades.
• Maharashtra is the richest Indian state and has an annual GDP of US$220
billion, nearly equal to that of Pakistan or Portugal, and accounts for 12% of
the Indian GDP followed by the states ofTamil Nadu and Uttar Pradesh.
• India's economy became the world's fastest growing major economy from
the last quarter of 2014, replacing the People's Republic of China.
26. Three sectors of Economy
• Primary Sector
• Secondary Sector
• Tertiary Sector
27. Primary Sector
• economic activity is centred from extraction of
raw materials from mother earth
• Example: Agriculture, Forestry, Mining,
Fishing.
28. Secondary Sector
• economic activity is centred around
manufacturing
• Example: production of goods and
construction.
29. Tertiary Sector
• it is all about services, also known as
service sector
• includes sub-sectors likeTrade;
Transport; Storage & warehousing;
Communication; Banking; Real Estate;
Business services; Public administration
32. Change in significance of sectors with
economic development
Primary Sector
Secondary
Sector
Tertiary
Sector(Service
Sector)
33. Reason for a strong Service Sector in India
• Foreign Companies outsourcing in India.
• Highly skilled, low-cost and educated workers.
• Strong Primary and Secondary sectors
34. Service Sector: India And China
9.7
43.9
46.4
China
Agriculture
Industry
Services
18%
25%
57%
India
36. Some Facts
• India is largely an agricultural country.
• With 58% of rural households are employed in the agro-sector.
• Agro-Sector is crucial contributor to the GDP of Republic Of
India and a multi-billion $ industry.
37. DidYou Know?
• India is largest producer, consumer as well as exporter of
spices and spice products.
• India is the global leader in milk production( #1 )
• India is ranked #3 in farm outputs.
42. • The food grains storage capacity is expected to expand to 35 MT in next
5 years.
• The agriculture sector in India is expected to generate better momentum
in the next few years due to increased investments in agricultural
infrastructure such as irrigation facilities, warehousing and cold storage.
• Factors such as reduced transaction costs and time, improved port gate
management and better fiscal incentives would contribute to the sector’s
growth.
• Furthermore, the growing use of genetically modified crops will likely
improve the yield for Indian farmers.
Future of Agro-Sector
44. Major Industries in India GDP
Automobile Industry- GDP
Pharmaceutical Industry- GDP
Bio-Technological Industry- GDP
Cement Industry- GDP
Iron and Steel Industry- GDP
Aviation Industry- GDP
Oil and Natural Gas Industry- GDP
Tourism Industry- GDP
Textile Industry- GDP
Realty Industry- GDP
Electronics & Hardware Ind.- GDP
45. The Indian economy is the twelfth biggest in the world for it has the GDP
of US$ 1.09 trillion in 2007.The country has the second fastest major
growing economy in the whole.
1960-1980: 3.5%
1980-1990: 5.4%
1990-2000: 4.4%
2000-2009: 6.4%
The trend of growth rate of India's economy demonstrates an upward
trend. During the period of 1960 – 1980 the economy saw a growth rate
of 3.5% due to the roles of major industries in India GDP. In the years
from 1980 to 1990 the growth rate showed a marked improvement of
5.4%, while it was slightly lower in the period from 1990 to 2000 which
was at 4.4%.The phase 2000 to 2009 saw a huge improvement and the
growth rate of GDP were marked at 6.4 percent.
46. The reasons for the rise of Industry Growth
Rate in India GDP
The reasons for the increase of Industry Growth Rate in India
GDP are that huge amounts of investments are being made in
this sector and this has helped the industries to grow. Further
the reasons for the rise of the Growth Rate of the Industrial
Sector in India are that the consumption of the industrial goods
has increased a great deal in the country, which in its turn has
boosted the industrial sector. Also the reasons for the increase
of Industry Growth Rate in India GDP are that the industrial
goods are being exported in huge quantities from the country.
47. The Indian government must boost the Industrial
Sector
Industry Growth Rate in India GDP thus has been registering steady
growth over the past few years.This has given a major boost to the Indian
economy.The government of India thus must continue to make efforts to
boost the industrial sector in the country. For this will in turn help to grow
the country's economy.
50. The Economy of India is the seventh-largest in the world by
nominal GDP and the third-largest by purchasing power
parity(PPP).The country is classified as a newly industrialised
country, one of the G-20 major economies, a member of
BRICSand a developing economy with an average growth rate
of approximately 7% over the last two decades.
Maharashtra(Marathi:महाराष्ट्र) is the richest Indian state and
has an annual GDP of US$220 billion, nearly equal to that of
Pakistan or Portugal, and accounts for 12% of the Indian GDP
followed by the states ofTamil Nadu (US$140 billion) and
Uttar Pradesh(US$130 billion). India's economy became the
world's fastest growing major economy from the last quarter
of 2014, replacing the People's Republic of China
51. what will happen if country gdp is high ?
1. income of people increases
2. production increases so definitely employment increases
3. increase in the lifestyle of the citizens
4. per capita income increases
so lets hope that in feature our country gdp increases
today in 2015-2016 our gdp has increased to 7.6 percent
our country is fastest growing economy.
the direction of the numbers is very postive.the policyand
reform measures the government has undertaken in last
one and a half years are showing better results.
Editor's Notes
Hello everyone we are here to present on the topic GDP trends in India. So let’s start up with Introduction to GDP.
What is GDP and why is it so important?
HEALTH OF COUNTRY --- It represents the total dollar value of all goods and services produced over a specific time period;
you can think of it as the size of the economy.
GDP attempts to measure the “USE” economy, i.e. the value of finished goods and services ready to be used by consumers, business and government
Let’s look at the official definition now. And then let’s look at what it means
Domestic means that we are only counting things that are produced within our borders ---CAN BE PRODUCED BY FOREIGNERS / CITIZENS ----NOTHING THAT IS PRODUCED OUTSIDE OF OUR DOMESTIC BORDERS GETS COUNTED! Not even what citizens produce
Measured quarterly / annually.
Total market value will be discussed in the formula on next slide
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
CONSUMPTION : represents all of the purchases of goods and services made by households ---- ACCOUNTS FOR LARGEST SHARE IN GDP (65-70%) ------ things consumers buy everyday! Cars, computers….
Government Spending: The expenses on things like National Defence, operational expenses etc.
INVESTMENT: The costs of building factories / homes / regular business expenses / increases or decreases in business inventories
EXPORTS: goods and services that are produced within out borders but sold in other countries. Money flows into our economy, exports add to our gdp
IMPORTS: produced in our country and sold outside our country, money flows out, imports are hence subtracted from gdp
Let’s look at an example!
Since the calculator produced was inside country A, the GDP of country A is 10$
But country A owned only 5$ of factors of production, hence it’s GNI is $5
Let’s move on to the next slide
Today, in terms of nominal GDP, India is at 7th place. There are various reasons associated with why it is at that position. In our presentation we have aimed at explaining some of these reasons in various sectors of Indian economy. But before that, brief history of Indian economy will be explained by my colleague Ankit Goyal in the next few slides.
Like Akshit has already given an introduction about the concept of economy and gdp of a country. Now I will continue briefing you about the relation of these 2 terms with India and their trends over the past years
History of Indian economy
From the beginning of 19th century British East India Company's gradual expansion and consolidation of power brought a major change in the taxation and agricultural policies, which tended to promote commercialization of agriculture with a focus on trade, resulting in decreased production of food crops, mass impoverishment and destitution of farmers, and in the short term, led to numerous famine leading to a vast difference in gdp growth of both the countries
In 2003,Goldman Sachs predicted that India's GDP in current prices would overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035, making it the third largest economy of the world, behind the US and China. India is often seen by most economists as a rising economic superpower and is believed to play a major role in the global economy in the 21st century
Starting in 2012, India entered a period of more anaemic growth, with growth slowing down to 4.4%.]
India is ranked 130th out of 189 countries in the World Bank's 2015 ease of doing business index. In terms of dealing with construction permits and enforcing contracts, it is ranked among the 10 worst in the world, while it has a relatively favorable ranking when it comes to protecting minority investors or getting credit
India has a large pool of highly skilled, low cost, and educated workers in the country
ALL ECONOMIC ACTIVITIES START FROM PRIMARY SECTOR
India has a large pool of highly skilled, low cost, and educated workers in the country
In early civilization, all activity was in primary sector. When the food production became surplus, peoples need for other products increased. As their bmost basic need was fulfilled. This led to dev. Of secondary sector