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GDP is the value of all final goods and services produced annually within the territory of a country .

The concept requires the understanding of the important observations as under: Gross: The term gross has been pre-fixed with domestic product to indicate that the latter is inclusive of depreciation, i.e., consumption of fixed capital. Domestic: Market value of the final goods and services produced within the domestic territory of the country. It doesnt matter whether production is done by domestic companies or the foreign companies . Example: Production of cars by the foreign companies in India will be treated as a part of GDP of India.

Introduction:
The Economy of India is the ninth largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). The independence-era Indian economy was inspired by the economy of the Soviet Union with socialist practices, large public sectors, high import duties and lesser private participation characterizing it, leading to massive inefficiencies and widespread corruption. However, in 1991, India adopted free market principles and liberalized its economy to international trade under the guidance of current Prime Minister Man Mohan Singh, who then was the Finance Minister of India under the leadership of P.V.Narasimha Rao the then Prime Minister .

India recorded the highest growth rates in the

mid-2000s, and is one of the fastest-growing economies in the world.


India is the seventeenth largest exporter and eleventh

largest importer in the world. Economic growth rates are projected at around 7.5%8% for the financial year 2011-2012.

Following are the reasons with GDP tends to increase: India is developing into an open-market economy, yet

traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labour force.

India has capitalized on its large educated English-

speaking population to become a major exporter of information technology services and software workers. . In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. Merchandise exports, which account for about 15% of GDP, returned to pre-financial crisis levels. An industrial expansion and high food prices, resulting from the combined effects of the weak 2009 monsoon and inefficiencies in the government's food distribution system, fuelled inflation which peaked at about 11% in the first half of 2010, but has gradually decreased to single digits following a series of central bank interest rate hikes.

New Delhi in 2010 reduced subsidies in fuel and fertilizers sold

a small percentage of its shares in some state-owned enterprises and auctioned off rights to radio bandwidth for 3G telecommunications in part to lower the government's deficit. The Indian Government seeks to reduce its deficit to 5.5% of GDP in FY 2010-11, down from 6.8% in the previous fiscal year. India's long term challenges include widespread poverty, inadequate physical and social infrastructure, limited nonagricultural employment opportunities, insufficient access to quality basic and higher education, and accommodating ruralto-urban migration.

Different GDP rates from 1995-2011

YEAR

GDP

1995
1996 1997 1998

7.35
7.56 4.12 6.02

1999
2000 2001 2002 2003 2004 2005

7.23
5.83 3.88 4.55 6.85 7.59 9.03

2006
2007 2008 2009

9.53
9.99 6.18 6.77

2010

10.09

Table showing the GDP growth rate from 2008 to 2010

Year
2008

March
8.5

June
7.8

September December
7.5 6.1

2009
2010

5.8
5.6

6.0
8.9

8.6
8.9

6.5
8.2

Sector wise GDP growth rate in India for 2010- 2011


Sector Manufacturing Farming Construction Mining Service GDP Growth Rate 9.8% 4.4% 8.8% 8% 9.8%

Top 10 countries by GDP Growth rate


S.No.
1. 2. 3. 4.

Country
Iraq Chad Liberia Equatorial Guinea

Flag of the Country

GDP Real Growth Rate


52.3% 38% 21.8% 20%

5.
6.

Venezuela
Ukraine

16.8%
12%

7.
8. 9. 10.

Angola
Ethiopia Liechtenstein Mongolia

11.7%
11.6% 11% 10.6%

NOMINAL GDP SECTOR COMPOSITION IN 2010 (in %age and millions of dollars)

# 28 13 27 21

Country Argentina Australia Austria Belgium

Nominal GDP 370,269 1,235,539 376,841 465,676

Agriculture 8.5% 3.9% 1.5% 0.7%

Industry 31.6% 25.6% 29.4% 21.9%

Service 59.8% 70.5% 69.1% 77.4%

Agriculture 31473 48186 5683 3260

Industry 117005 316298 110791 101983

Service 221421 873526 260397 360433

7
9 2 35 31 0 5 4 32 10 18 26 8 3

Brazil
Canada China Colombia Denmark European Union France Germany Greece India Indonesia Iran Italy Japan

2,090,314
1,574,051 5,878,257 285,511 310,760 16,282,230 2,582,527 3,315,643 305,415 1,537,966 706,735 407,400 2,055,114 5,458,872

5.8%
2.2% 10.2% 9.3% 1.1% 1.8% 2% 0.9% 4% 18.5% 15.3% 11% 1.9% 1.4%

26.8%
26.3% 46.9% 38% 22.8% 25% 18.5% 27.8% 17.6% 26.3% 47% 41.7% 25.3% 24.9%

67.4%
71.5% 43% 52.7% 76.1% 73.1% 79.5% 71.3% 78.5% 55.2% 37.6% 47.3% 72.8% 73.8%

142141
34629 599582 26553 3418 293080 51651 29841 12217 284524 108130 44814 39047 76424

560204
413975 2756903 108494 70853 4070558 477767 921749 53753 404485 332165 169886 519944 1359259

1408872
1125446 2527651 150464 236488 11902310 2053109 2364053 239751 848957 265732 192700 1496123 4028648