India GDP


The India GDP is a combination of all the differential factors, contributing to the welfare of the India economy. India GDP gives us a combined report of the performance of the Indian economy. 'Cost factor' or 'Actual price' method - these are the two methods to calculate Indian Gross Domestic Product. The main factor that contributed to the growth of India GDP post 1990s was the opening-up of the Indian economy.

The balance-of-payments crisis of 80s of the Indian economy led to the paradigm shift of the Indian Economy. The markets were opened up, the Government leveraged the entry of private investments. As a result of this, more investments flowed into the markets. More so by the Foreign direct investments (FDIs) and foreign institutional investors (FIIs), the India GDP growth saw a phenomenal increase. Bulk of the Government undertakings were divested into lots of private business houses.


Gauging the health of the India economy - India GDP is the best tool! Going by figures, India GDP has already crossed the trillion-dollar mark, other peers in this sphere being US, Japan, Germany, China, UK, France, Italy, Spain, Canada, Brazil and Russia.


After the liberalization era of the India economy, the growth story of the India GDP was driven by the following sectors of Indian industry:

  • Information Technology
  • Information Technology Enabled Services
  • Telecommunications
  • Electronics and hardware
  • Automobiles
  • Pharmaceuticals and biotechnology
  • Consumer durables
  • Retail
  • Textiles
  • Infrastructure
  • Construction
  • Airlines
  • Hospitality
  • Power
  • Oil and natural gas
  • Fertilizers and chemical

The GDP of India, even after the opening up of the economy and other relaxed norms couldn't survive the aftermath of the global financial crisis. The GDP of India over the past two fiscals (2008-09 and 2009-10) experienced considerable slowdown.

This moderate growth of the India economy has given rise to moderate expectations with respect of India GDP. Though various rating agencies, economists, business houses predict a healthy growth in India GDP in the next two years, yet skepticism is still the order of the day. Achieving a 9% GDP growth by 2012 is immensely impractical, looking at the rate at which things are improving.

Reasons for fall in India's GDP growth:

Interest rates are at its peak (experiencing a 6-year high), thus consumer spending has gone down considerably and in a way investments have also reduced. Else than exploring better export prospects, Indian economy doesn't have any other elements which can steer its growth path. Year-on-year GDP growth rate stood at around 8.8% for first three months of 2009 but then again experienced a fall.

Is the Indian economy severely affected?

Countering the inflationary pressures had been the main agenda of the Government for a long time during the initial months of the financial year. But, the Government must aim at achieving a high GDP growth rate, rather than aiming at countering other external pressures. A dramatic improvement might not be expected, but a slow and steady growth path is surely desirable.