Economy 2

ECONOMY: An economy consists of the economic system of a country or other area, the labor, capital and land resources, and the economic agents that socially participate in the production, exchange, distribution, and consumption of goods and services of that area. World Economy: World economy generally refers to the economy, which is based on economies of all of the world's countries, national economies. The 12 largest economies (the US, China, Japan, Germany, France, the United Kingdom, Italy, Russia, Spain, Brazil, Canada and India) contributed just over half of all economic growth. Global output (gross world product) (GWP) rose by 3.2% in 2008, led by China (9%, equal to 21% of global growth), the US (1.1%, or 12% of growth), the European Union (0.9%, for a 10.5% share of growth) and India (7.3%, equal to 5.6% of the total rise). The 12 largest economies (the US, China, Japan, Germany, France, the United Kingdom, Italy, Russia, Spain, Brazil, Canada and India) contributed just over half of all economic growth in 2008.Growth results in the wealthy, or “advanced” economies, slowed by two-thirds, from 2.7% in 2007 to just 0.9% in 2008. Emerging Asia slowed from 9.8% to 6.8%; Emerging Europe from 5.4% to 2.9%; the Commonwealth of Independent States from 8.6% to 5.5%; the (non-OECD) Western Hemisphere from 5.7% to 4.2%; the Middle East from 6.3% to 5.9%; and Africa from 6.2% to 5.2%. World top 10 countries GDP 2005 yearGDP1. World$55,500,000,000,0002. United States$11,750,000,000,0003. European Union$11,650,000,000,0004. China $7,262,000,000,0005. Japan $3,745,000,000,0006. India $3,319,000,000,0007. Germany $2,362,000,000,0008. United Kingdom$1,782,000,000,0009. France$1,737,000,000,00010 Italy $1,609,000,000,000 Year 2006 1. United States$13 trillion2. China$10 trillion3. Japan $4.17 trillion4. India $4.16 trillion5. Germany$2.6 trillion6. United Kingdom$2.1 trillion7. France$1.9 trillion8. Italy$1.8 trillion9. Russia $1.72 trillion10. Brazil $1.70 trillion 2007 year ,[object Object],Year 2008 ,[object Object],Gross domestic product 2009 Millions of Ranking Economy US dollars ,[object Object],INDIAN ECONOMY:- India is a developing country. It’s including from those countries which are fastest growing as a economy. Lot’s of MNC’s (like coco cola, Pepsi, Nokia, Maruti Suzuki etc.) work in India they generate revenue from here. Indian govt. gives them liberalization so they can invest more and more in India. Due to this investment Indian GDP growth growing fast. Indian people get jobs, facilities and they can know easily about new technology. Indian GDP rate is higher than GNP. Economic liberalization, including reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997.Indian economy depend on three major sectors agriculture, industry and service. An industrial slowdown early in 2008, followed by the global financial crisis, led annual GDP growth to slow to 6.5% in 2009, still the second highest growth in the world among major economies. India escaped the brunt of the global financial crisis because of cautious banking policies and a relatively low dependence on exports for growth. Indian GDP Growth Rate:- The Gross Domestic Product (GDP) in India expanded at an annual rate of 8.80 percent in the last reported quarter. From 2004 until 2010, India's average quarterly GDP Growth was 8.37 percent reaching an historical high of 10.10 percent in September of 2006 and a record low of 5.50 percent in December of 2004. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India's output with less than one third of its laborforce. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points. This page includes: India GDP Growth Rate chart, historical data and news. Table 1: India's GDP Growth, 2009-10 2008-092009-10Q1 09-10Q2 09-10Q3 09-10Q4 09-10Agriculture1.60.21.90.91.80.7industry3.99.34.67.811.113.1manufacturing3.210.83.89.113.816.3Minning &quarrying1.610.68.210.19.614.0service9.88.57.910.77.28.4Total GDP6.77.46.08.66.58.6Non agriculture GDP7.78.86.89.78.410.0Demand consumptionPrivate consumption6.84.32.96.45.32.6GOVT. Consumption16.710.515.330.52.52.1Fixed Investment4.07.2-0.71.68.817.7Change In Stock61.25.9-0.94.28.711.1Export Of Good &services19.3-6.7-16.0-15.8-7.514.2Import Of Goods & Services23.0-7.3-8.5-10.5-5.8-3.7 Source: Central Statistical Organization. Major Sectors of Indian Economy Below is the list of some of the major Indian Economic Sectors: Agricultural Sector of Indian Economy: The growth rate of India GDP is 6.7% in 2009. The agricultural sector has always been an important contributor to the India GDP. This is due to the fact that the country is mainly based on the agriculture sector and employs around 60% of the total workforce in India. The agricultural sector contributed around 17.2% to India GDP in 2009. Agriculture Growth Rate in India GDP in spite of its decline in the share of the country's GDP plays a very important role in the all round economic and social development of the country. The Growth Rate of the Agriculture Sector in India GDP grew after independence for the government of India placed special emphasis on the sector in its five-year plans. Further the Green revolution took place in India and this gave a major boost to the agricultural sector for irrigation facilities, provision of agriculture subsidies and credits, and improved technology. This in turn helped to increase the Agriculture Growth Rate in India GDP. Agriculture Growth Rate in India GDP has slowed down for the production in this sector has reduced over the years. The agricultural sector has had low production due to a number of factors such as illiteracy, insufficient finance, and inadequate marketing of agricultural products. Further the reasons for the decline in Agriculture Growth Rate in India GDP are that in the sector the average size of the farms is very small which in turn has resulted in low productivity. Also the Growth Rate of the Agricultural Sector in India GDP has declined due to the fact that the sector has not adopted modern technology and agricultural practices. Agriculture Growth Rate in India GDP has also decreased due to the fact that the sector has insufficient irrigation facilities. As a result of this the farmers are dependent on rainfall, which is however very unpredictable. 2. Commerce and Industries of Indian Economy: Directorate of Industries & Commerce, the regulatory authority is given the responsibilities of allowing sectoral expansion in India by offering financial support for Infrastructure through manufacturing estates, inducements for principal Investment and other finances. It also offers the industrialist, power, land and water, besides authorization of financial incentives. 3. Communication and IT sector of Indian Economy: One of the rapidly emerging sector of the Indian Industry in context of productivity and export, Electronics and Information Technology is entirely de-licensed excluding defence and aviation electronics. Besides the liberalization in FDI and exim plans of the nation's fiscal structure, the sector is drawing significant interest not only as a massive market but also as a competent manufacturing unit for global firms. Over the past few years, 'Software Development and IT Enabled Services' have surfaced as the prospects for India in the international affairs. The central government has undertaken all required measures to make India an international IT superpower and a leader in the era of information insurgency. The government has also declared endorsement of IT as one of the top five precedence of India and has comprised a National Task Force on IT and Software Development. 4. Finance sector of Indian Economy: The Ministry of Finance handles the finances of the government and is concerned with all the fiscal activities taking place in India. Some of the chief functions of the ministry are planning authoritarian guidelines and Budget. The ministry is also delegated with the major tasks of forming tenets, modifying pays, and other services of the government workforces. It also has a governmental power over the Local Fund Audit department, Directorates of National Savings department, Insurance department, etc. 5. Health & Family Welfare sector of Indian Economy: The major concern of the Indian Government is health and well-being of the society. In accordance to this, the government has launched several health programmes under the authority of the Ministry of Health and Family Welfare. Additionally, the government has released a website named Healthy India to direct Indians on upholding their health through a balanced diet. 6. Transport sector of Indian Economy: With the alteration in fiscal situation, aspects such as industry globalization, global financial incorporation, elimination of economic hurdles to trade and an improved rivalry have enhanced the transport requirements. The sector is one of the most vital infrastructure needs which is significant for the growth prospects and plays a vital part in construction or destructing of viable positioning. India is a vast country, so the sectors contributing to the country's GDP is also big in numbers. Various sectorsfalling under the India GDP composition includes food processing, transportation equipment, petroleum, textiles,software, agriculture, mining, machinery, chemicals, steel, cement and many others. Agriculture is the predominant occupation in India, employing more than 50% of the population. The service sector accounts foremploying more than 25% while the industrial sector accounts for more than 10%. Agriculture: 17.2%Industry: 29.1%Services: 53.7% Inflation: 7.8% (2008 Estimate) Labor force: 523.5 million (2008 Estim) Table 1: India's GDP Growth, 2009-10 2008-092009-10Q1 09-10Q2 09-10Q3 09-10Q4 09-10Agriculture1.60.21.90.91.80.7Industry3.99.34.67.811.113.1Manufacturing3.210.83.89.113.816.3Minning &quarrying1.610.68.210.19.614.0Service9.88.57.910.77.28.4Total GDP6.77.46.08.66.58.6Non Agriculture GDP7.78.86.89.78.410.0Demand ConsumptionPrivate Consumption6.84.32.96.45.32.6GOVT. Consumption16.710.515.330.52.52.1Fixed Investment4.07.2-0.71.68.817.7Change In Stock61.25.9-0.94.28.711.1Export Of Good &Services19.3-6.7-16.0-15.8-7.514.2Import Of Goods & Services23.0-7.3-8.5-10.5-5.8-3.7 Source: Central Statistical Organization. India’s GDP The revised estimates of India's GDP for 2009-10 have been interesting in manyregards. The GDP growth at 7.4 percent is higher than 6.7 percent in the previous yearindicating that the economy is surely on a recovery path. In a year of the worst drought since1972, the growth in agriculture turned out to be positive. Industry has led the recovery withboth manufacturing and mining showing equally high growth rates. This sector has shownrising quarterly growth rates while agriculture and services have not shown such a seculartrend. The strong growth is driven from the demand side, predominantly by investment;consumption remains subdued. The external sector did contribute to growth through a largerdecline in imports as compared to exports. All these features of GDP growth in the last yearwill have implications for the growth rate for the current year. Agriculture: An important question is why extremely poor monsoon did not lead to a decline inagricultural output last year. The rain deficit had been higher at 23 percent than the deficit of19 per cent in the previous drought year of 2002-03. In 2002-03, agricultural output declinedby 7.2 percent; in 2009-10, it grew by 0.2 percent. One obvious reason for this difference is that the spatial and temporal distribution ofmonsoon was more favorable in 2009-10 than in 2002-03. Another reason is that the cropproduction (food and cash crops) now constitutes lea than half (about 45 percent) of totalagricultural output (including forestry and fishing) and the non-crop output (fruits andvegetables, livestock, forestry and fishing) is much less affected by drought.Yet anotherimportant factor is that the drought last year occurred immediately after a subpar crop in theprevious year and hence the rate of decline is bound to be lower due to a lower base. This is acontrast to the previous monsoon shock of 2002-03, which had come after the bumper crop of2001-02. Industry: Industry recorded a high growth of 9.3 percent in 2009-10 against a growth of 3.9percent in 2008-09. This is due to high growth rates in both manufacturing (10.8 percent) andmining (10.6 percent) sectors. However, the growth rates in services showed a decline from9.8 percent in 2008-09 to 8.5 percent, mainly because of the sharp decline in the growth ofthe component of community, social and personal services from 13.9 percent in 2008-09 to5.6 percent in 2009-10. This reflects the petering out of the effects of fiscal stimulus. Manufacturing growth showed consistently rising growth rates quarter after quarterfrom the second quarter of 2009-10, 9.1 percent in Q2 to 16.3 percent in Q4. The growthrates in mining sector had been exceptionally high during 2009-10 due to the coming onstream of gas production from the new Kaveri basin and crude oil production from theBarmer fields in Rajasthan. Table 2: Contribution to GDP Growth by Demand Components 2008-092009-10Private Consumption4.02.6Government Consumption1.71.2Fixed Investment1.32.4Change In Stocks-2.20.1Valuables 0.30.1Net Export-1.80.6Discrepancies 1.80.7GDP At Market Price5.17.7 Source: Constructed from CSO data. Investment: Table 2 calculates the contribution to GDP growth from the demand side. The growthin 2008-09 is contributed mostly by consumption demand, from both the private sector andthe government. The huge inventory destocking and negative net exports could explain thelow growth during 2008-09. Source: Constructed from CSO data. In 2009-10, consumption demand, private and government, contributed less than halfthe growth in GDP. A third was contributed by investment, including stock accumulation andvaluables. Net exports also contributed positively to growth. However, it may be noted thatthe contribution from net exports did not come through a large export growth but from a largeimport decline.

Economy 2

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