Analysis of the article.

1. POWERPOINT TEMPLATE
FRENZY AROUND FALLING GDP IS TAKING FOCUS
OFF THE REAL BIG THREAT FACED BY INDIA

2. S. R. LUTHRA INSTITUTE OF
MANAGEMENT
SUBJECT: ECONOMICS FOR MANAGERS
NAMES: ER. NO.
CHARADVA MIRA [178050592506]
JOSHI ASHWINI [178050592527]
SUBMITTED TO:
MR. PRATIKSINH
VAGHELA
[ASSISTANT
PROFESSOR]

3. SUMMARY
 IN SHOWING A CONSISTENT DECELERATION IN
INDIA'S REAL GROSS DOMESTIC PRODUCT (GDP)
OVER SIX CONSECUTIVE QUARTERS, A CACOPHONY
OF CONCERNED VOICES HAVE BEEN HEARD.
 BUT RATHER THAN THIS IN OTHERS THE TRENDS
THERE ARE CAUSES FOR CONCERN.
 FIRST AND FOREMOST ARE THE GROWTH
FIGURES: THE GDP HAD DECELERATED FOR
EXACTLY SIX QUARTERS BETWEEN Q1 OF 2011 AND
Q2 OF 2012. GROWTH RATE HAD FALLEN TO A
LOWLY 4.1 PER CENT. HOWEVER, IN THE VERY
NEXT QUARTER IT HAD BOUNCED BACK TO 6.1 PER
CENT.

5. SUMMARY (CONTD.)
 GENERAL CONCERN IS THE LEVEL OF INVESTMENT IN THE
ECONOMY:
THE LEVEL OF PRIVATE AND HOUSEHOLD INVESTMENT
HAS HIT ROCK BOTTOM AND ONLY PUBLIC INVESTMENT
HAS BEEN PUSHING THE ECONOMY FORWARD. GROSS
FIXED CAPITAL FORMATION (GFCF), THE LEADING
INDICATOR FOR INVESTMENT, HAS BEEN CONSISTENTLY
FALLING OVER THE LAST DECADE. IN 2007, INDIA'S GFCF
HAD REACHED AN ALL-TIME HIGH OF 36 PER CENT OF
GDP, CLOSE TO CHINA'S 39 PER CENT. SINCE THEN,
INDIA'S GFCF HAS FALLEN TO 27 PER CENT WHILE IT HAS
RISEN TO 43 PER CENT FOR CHINA. THIS POINTS TO THE
FACT THAT INVESTMENT SENTIMENT NEVER RECOVERED
IN INDIA AFTER THE 2008 CRISIS.

6. SUMMARY (CONTD.)
 LOW CREDIT TAKE-OFF:
IT INDICATES THAT INDUSTRIALISTS ARE
UNSURE OF FUTURE PROSPECTS AND HAVE
POSTPONED INVESTMENTS OWING TO WEAK.
THE COUNTRY'S FOREIGN EXCHANGE
RESERVES HAVE CROSSED $400 BILLION –
HUGE BY ANY STANDARD. TO PUT THINGS IN
PERSPECTIVE, THESE RESERVES EQUALLED 78
PERCENT OF INDIA'S TOTAL EXTERNAL DEBT
(BOTH SHORT AND LONG TERM) AT THE END OF
MARCH

7. SUMMARY (CONTD.)
 The most concerning factor of the economy, which also
has had a similar long-term history, is unemployment.
 Lack of jobs is an aspect of the Indian economy that
simply can no longer be ignored.
 Since India missed its own industrial boom and directly
ended up becoming a service-led economy, jobless
growth has been a problem for long.
 This is because services are not as labour-intensive as
manufacturing

9. http://economictimes.indiatimes.com/news/economy/indicators/view-frenzy-
around-falling-gdp-is-taking-focus-off-the-real-big-threat-faced-by-india
Thank You !