is india gdp growth sustainable

7/31/2019 Is India GDP Growth Sustainable

1/13

Nikhil Jain (11220)Mahesh Khot (11226)

Sushil Taru (11253)

Shridhar Patil(11252)


2/13

The GDP measures the total (money) value offinal output of goods and services producedwithin the countrys domestic economy byresidents and non-residents


3/13

Growth rate at which inflation is kept low withlow level of unemployment

Non inflationary rate of growth is themaximum rate of growth that the Indianeconomy can achieve without fanninginflationary pressures. It is similar to the

concept of potential rate of growth and iscrucial input in the monetary decisions


4/13

GDP Growthrate

9.6 9.3 6.7 8.4 8.4 6.7

Inflation 6.6 4.7 8.1 3.8 9.6 9.1

Crude

oil(Brent )

$ 60 $65 $98 $ 45 $ 80 $ 105

Currency 45 45 40 49 47 48


5/13

To control the inflation RBI has continuously increasedinterest rates from 2010 until recently

This made the credit availability costlier which hamperedgrowth


6/13

Consumer and business confidence is veryimportant for determining economic growth.If consumers are confident about the futurethey will be encouraged to borrow and spend.If they are pessimistic they will save andreduce spending.


7/13

India imports about 70 % of its crude oil need

There has been continuous increase in crude oil

prices which is hampering the BOP Crude oil prices increased from $70 to current $115


8/13

. If the rupee depreciates exports would become more

competitive and imports more expensive. This would

help to increase demand for domestic goods andservices but a depreciation could cause inflation.


9/13

It can be said that Union Budget 2012 was largely juststatement of revenue & expenditure , pretty much non-

event Significant tax reforms like GST & DTC have remained in

pipeline

Mining sector growth is -2.2 % vs 5%

Illegal mining in karnataka

Slowdown in manufacturing growth from 7.6 % to 3.9 %

Costlier credit availability , high commodity prices ,crude , high wages impacting growth


10/13

. Investment in roads, transport and communication can

help firms reduce costs and expand production. Withoutnecessary infrastructure it can be difficult for firms to be

competitive in the international markets. This lack ofinfrastructure is often a factor holding back somedeveloping economies.

. Human capital is the productivity of workers. This will be

determined by levels of education, training andmotivation. Increased labour productivity can help firmstake on more sophisticated production processes andbecome more efficient.

. In the long run development of new technology is a key

factor in enabling improved productivity and highereconomic growth.


11/13

. Political instability can provide a negative shock to

growth.

UPA government is more concerned aboutsatisfying alliance parties than solving economyproblems

The monsoon can really impact the gdp growth

The forecast for 2012 is normal monsoon

Rising wages has been a serious problem

The focus is shifting from BRIC countries to african


12/13

Increase in petroleum product prices mayincrease inflation

Tough stand is needed for deregulation ofdiesel , urea etc.

Need to speed up the reforms

It is expected that in the latter half part of2012 growth will pick up

Need to handle both inflation as well asgrowth.


13/13

is india gdp growth sustainable

Documents