India Real GDP Growth

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It is the growth of Gross Domestic Product or GDP that determines the performance of Indian economy. Between the period 2007 and 2008, India real GDP growth stood somewhere at 9.20% and 9.00%, respectively. However, owing to the global financial meltdown, witnessed by all the developed and developing nations alike, with few still managing to perform better, the GDP growth rate of India drastically fell down to 7.40 %. This also added to the increase of fiscal deficit in India by 10.3% in the same period, making it the highest in the world.

Components affecting GDP Growth in India

The components that decide the GDP growth in India can be divided under three broad categories like:

Agriculture
Industry
Services

Contribution of the sectors in GDP growth

According to statistics, the service industry contributes about 54% and industrial sector makes up 29% of the GDP. The agriculture sector accounts for 17% of the Gross Domestic Product. Major employment is seen in the arena of agriculture, which can be projected as 60%. Industrial sector and service sector account for 12% and 28% of employment, respectively.

The main industries that contribute efficiently towards GDP growth in India are:

Textiles
Chemicals
Steel
Cement
Food processing
Transportation equipment
Mining
Petroleum
Machinery
Information technology enabled services and software

In the agricultural sector, the products that largely decide the fate of the economic growth in India are rice, wheat, pulses, cotton, oilseed, jute, sugarcane, tea, potatoes, cattle, water sheep, goats, buffalo, poultry and fish.

The recent data, which considerably reflect the performance of the above mentioned sectors in India's GDP growth, are provided as below.

A snapshot of India real GDP growth in 2008-09:

Manufacturing industry registered a growth of only 2.4% in 2008-09 as against 8.2% in 2007-08.
Agriculture saw a rise of 1.6% in the current fiscal as against 4.9% in 2007-08.
Community and social and personal services, which reflected positive growth in the current financial year, grew by 13.1% in 2008–09 from 6.8% in the previous financial year.
Mining and quarrying also showed improvement by touching 3.6% growth rate from 3.3%.
Gas, electricity and water supply including other services sectors showed marginal growth in 2008-09 reaching 3.4% as against 5.3% in 2007–08.
Hotels, trade and transport sectors posted 8.1% growth as against 13% in the last fiscal.

The growth in the construction industry was 7.2% in the previous fiscal against 10.1% in the period between 2007 and 2008. Nevertheless, it reflected the same rate of growth in the 4th quarter reaching 6.8%.