UPSC Exam   »   India fastest growing economy

The Editorial Analysis: India is Not the Fastest Growing Big Economy

 

Economic growth in India: Relevance

  • GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

 

GDP growth in India: Context

  • The Provisional Estimates of Annual National Income in 2021-22 just released show that GDP grew 8.7% in real terms and 19.5% in nominal terms. It makes India the fastest growing major economy in the world.

 

GDP growth in India: Key points

  • The real economy is 1.51% larger than it was in 2019-20, just before the novel coronavirus pandemic hit the world. In nominal terms it is higher by 17.9%.
  • These numbers imply that the rate of inflation was 10.8% in 2021-22 and 16.4% between the two years, 2019-20 and 2021-22.
  • This above data implies almost no growth and high inflation since the pre-pandemic year. So, the tag of the fastest growing economy means little.

 

The Editorial Analysis: India is Not the Fastest Growing Big Economy_40.1

 

India fastest growing economy: Issues

  • Difference in meaning: The quarter-to-quarter growth provides the data that is different from the one given above. It means that if an economy drops sharply and then rises equally fast to reach its earlier level, that cannot be taken as an indication of a rapidly growing economy.
  • Problem in data: The first issue is that during 2020-21, due to the pandemic, full data could not be collected for Q1. Further, for agriculture, quarterly data assumes that the targets are achieved. Very little data is available for agriculture sector; however, it is simply assumed that the limited data available for the organised sector can be used to act as a proxy.
  • Errors in components: If GDP data are incorrect, data on its components — private consumption and investment — must also be incorrect. Most often, ratios are applied to the GDP to estimate them. But, if the GDP is in error, then the ratios will yield erroneous results. In brief, neither the total nor the ratios are correct. Clearly, consumption and investment figures are over-estimates and very likely because the decline in the unorganised sectors has not been captured.

 

Read current affairs for UPSC

“CiSS Application” under the Baal Swaraj Portal Launched India-Vietnam Relations: India and Vietnam Sign Mutual Logistics Agreement India Ocean Mission in 2023 Green Open Access Rules 2022
Sustainable Development Report 2022 Biotech Start-up Expo 2022: BIRAC Rapid Increase in India’s Trade with Gulf Cooperation Council National Strategy for Sustainable Tourism, Responsible Traveller Campaign
Ex Khaan Quest 2022 National Tribal Research Institute (NTRI): To be Inaugurated as part of Azadi Ka Amrit Mahotsava Growing Heavy Metal Pollution in Rivers India’s International Cooperation in disability sector- An Overview
Ethanol Blending in India: India Achieved 10% Target Ahead of Schedule Leaders in Climate Change Management Understanding Gun Control Legislation in Various Countries SHRESHTA Scheme Launched

Sharing is caring!

Thank You, Your details have been submitted we will get back to you.