INDIA'S DECREASING GDP GROWTH

 India is among the top three strategic growth markets that companies turn to when looking   to expanding their global footprint and increase business success.

• National Income Rank – 6th (nominal GDP); 3rd (GDP at PPP)
• GDP of India – $2.454 trillion (nominal GDP); $9.489 trillion (GDP at PPP)
• GDP growth rate – 7.2%
• Per-capita Income Rank – 141th (nominal GDP); 123rd (GDP at PPP)
• Per-capita GDP value – $1850 (N) ; $6,616 (PPP)
• Inflation (CPI) : 1.54%
• Sectoral contribution to GDP – Agriculture – 17.32% Industry – 29.02%, Services – 53.66%
• Labour contribution to GDP – Agriculture – 47% Industry – 22%, Services – 31%
• Main Industries- Software, Petroleum Products, Chemicals, Pharmaceuticals, Agriculture, Textiles, Steel, Transportation Equipment, Machinery, Leather, Cement, Mining, Construction
• Total Export Value- $276.28 billion
• Total Import Value- $384 billion
• Export Goods- Precious metals (14%), Textiles (14%), Chemical products (14%), Minerals (12%), Machines (9%), Metals (8.1%), Transportation (7.6%), Vegetables (5.9%), other (15.4%)
• Import Goods- Crude oil (18%), Machines (18%), Minerals (10%), Chemical products (9.8%), Gold (9.6%), Metals (6.9%), Diamonds (4.7%), Plastics (3.7%), Transportation (3.7%), other (15.6%).
• India has sustained rapid growth of GDP for most of the last two decades leading to rising per capita incomes and a reduction in absolute poverty. Per capita incomes (measured in US $) have doubled in 12 years
• But India has one third of all the people in the world living below the official global poverty line. It has more poor people than the whole of sub-Saharan Africa
• Per capita income is $1,270, placing India just inside the Middle Income Country category
• India's per capita income is 1/20th that of the UK
• Life expectancy at birth is 65 years and 44% of children under 5 are malnourished. The literacy rate for the population aged 15 years and above is only 63% compared to a 71% figure for lower middle income countries.
• Despite a strong attempt to become an open economy, exports of goods and services from India account for only 15% of GDP although this will rise further in the years ahead
• India runs persistent trade and fiscal deficits and has suffered from high inflation in recent years
• India's growth rate has slowed and high inflation is a constraint on competitiveness and growth.
• Investments by Indian businessmen abroad have overtaken foreign direct investment for the first time – reflecting a lack of confidence among Indian entrepreneurs about their home economy.
                                Growth and Development Limiters for India
• Despite optimism for India's prospects for economic growth and development, there are a number of obstacles which may yet see growth and development falter.
  • Poor infrastructure - notably in transport and power networks
  • Low productivity and weak human capital. A high % of workers are low-skilled and work in small businesses
  • High inflation and a persistent trade deficit
  • Low national savings as a share of GDP, low share of capital investment
  • Relatively closed economy - India is a net importer of primary products.                             
  • Indian Development – An Infrastructure Gap
  • India is a good case study to use when discussing the problems that persist when a country cannot rely on adequate critical infrastructure such as roads, railways, power and basic sanitation. India wants to build $1 trillion worth of infrastructure in the next five years but the government expects the private sector to fund half of it – this is unlikely! Poor infrastructure hurts the Indian economy in numerous ways:
    1. Causes higher energy costs and irregular energy supplies for nearly every business and especially India emerging manufacturing sectors – there were huge power black outs in 2012
    2. It is more expensive to transport products across the country and it creates delays at ports hamper export businesses and delays at airports which increases the cost of international freight.
    3. It makes India less attractive to inward FDI
    4. It adds to the cost of living and limits the extent to which millions of India's lowest income families can escape extreme poverty
    5. A creaking infrastructure damages the reputation and potential of India's tourism industry.
    Despite these growth constraints, India's expansion far exceed.In a report on India in the Financial Times in 2012, it was claimed that
    “India's failure to adopt enough of the large-scale, labour-intensive manufacturing that has propelled the successful development of China and other east Asian countries is now regarded as one of the greatest weaknesses of the Indian economy."
    India's growth has been impressive in recent years but this is a country whose development is hampered by endemic structural problems. India requires significant investment in infrastructure, manufacturing and agriculture for the rapid growth rates of the last fifteen to twenty years to be sustained.