Indian Economy - Some Important Indicators

NATIONAL INCOME

·         Domestic saving rate has declined to 30.4% in 2011/12

·         CAD - 4.2% of GDP; merchandise trade deficit at ~10% of GDP; capital flows: 3.7% of GDP

·         Fiscal deficit for the Centre was 5.89% of GDP in RE 2011/12; Consolidated: 8.2 per cent of GDP

·         Employment elasticity falling from 0.43(99-04) to projected 0.25 in 2011-16

·         Current RBI numbers: Policy ratios: repo: 8%, reverse repo: 7%, MSF: 9%; Reserve ratios: CRR-4.25%; SLR-23%, USD-INR: 54.83

·      WPI: Primary goods carry a weight of 20.12%, 'fuel and power' 14.91% and manufactured products 64.97%.

INDUSTRY

·         National Manufacturing Policy Goals:- Increase manufacturing growth to 12-14%; Share of manufac to 25% of gdp by 2022; create 100m jobs by 2022

·         MSME: MSME segment constitutes about 26 million units, contribution of 8 % in GDP, a share of 45 % of total industrial output, over 8000 products manufactured, 40 % of export, employment of 60 million people having a potential of creating 1.3 million jobs every year further ensuring balanced regional and inclusive growth

AGRICULTURE

·         GDP share: 30% in 90-91 to <15% in 2011-12;

·         GDP agri – 3.9% in 2005-11; High CV => Volatile – 6x than GDP overall

·         BRICS experience that 1% g agri is 2-3x more effective than reducing povrty than non-agri g;

·         ~ 52% of workforce is still employed by farm sector (NSS 66th Round);

·         average size of operational holdings has diminished progressively from 2.28 ha in 1970-71 to 1.55 ha in 1990-91 to 1.23 ha in 2005-06 ( Agri census 2005-06); Marginal holdings ( less than 1 ha) – 65%

TRADE

Services trade:- Exports grew at 20.6% cagr in 2004-11; Size – software 42% share; Imports cagr 20.2%; Total trade incl services 50% of gdp in 2010-11 (25% in 97-98)

Goods trade:

	Exports	Imports
Value	45b $ (2001) to 303b $ (2012)	50b $ (2001) to 488b $ ( 2012)
CAGR	19.5% in decade	25% in decade ( 2000s)
Share in global X/M	0.7% -> 1.5% [2000-2010]	0.8% -> 2.2% [2000-2010]

·         In the top 100 imports of the world in 2010, India has only 15 items with a share of 2 % and above. [Shows low export diversification]

·         Share of Asia and ASEAN in total trade increased from 33.3 % in 2000-1 to 57.3 % in 1st half of 2011-12,

·         Europe and America fell from 42.5 % to 30.8 %

·         India’s trade deficit as a per cent of GDP at 9.9 percent in 2012, is one of the highest.

·         In the 2 yrs 2009-10 to 2011-12, net gold imports increased by 28b $ or 1.5% of GDP -> Had it been constant CAD would be a manageable 2.7% instead of the daunting 4.2%

·         Linkage with World Economu:

o   Trade openness (goods and services trade) increased substantially with the trade-GDP ratio doubling since 1999-2000. [ 17.2% (90-91) to 29.2% (01-02) to 53.7 ( 08-09) ]

o   ratio of total external transactions (gross current account flows plus gross capital account flows) to GDP – an indicator of both trade and financial integration – was 112% in 2008-09 up from 44% in 1998-99.

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