National Income Trend in India

1504 Words Oct 21st, 2013 7 Pages

India is home to 1.24 billion people, which is about 17.5 per cent of the global population. The
Indian economy is the 12th largest in USD exchange rate terms. India is the second fastest growing economy in the world. However, it accounts for only 2.98 per cent of world GDP in US dollar terms and 5.0 per cent in purchasing power parity (ppp) terms. Hence, there exists a huge potential for catch up. The global welfare too is linked to progress in India as reflected in the keen global interest in India. But, India seems to inspire and disappoint at the same time.
This is reflected in various comments on the Indian economy.
The below graph represents the National Income Trend of India for the
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With such imbalance in the interest rates and inadequate financial markets, thus making the economic growth to dwindle.

The Below graph represents the GDP per capita for the year 1950, compared with that of 1990 and 2006.

GDP per capita

This is evident from the fact that it took 40 long years from 1950-51 for India’s real per capita
GDP to double by 1990-91. But, 1991-92 was a defining moment in India’s modern economic history as a severe balance of payments (BoP) crisis prompted far reaching economic reforms, unlocking its growth potential. As a result, in only 15 years, India’s per capita income doubled again by 2006-07. If the current pace of growth is maintained, India’s per capita income could further double by 2017-18, in 10 years time. While acceleration in India’s recent economic growth is noteworthy, maintaining the pace, no doubt, will be challenging.

Analysis of the Inflexion points in National Income trend
India’s net income from 1991 to 2012 can be explained in graphical form


First inflexion point:
In 1992 there was the inflexion point in India’s economy. The triggers behind growth inflexion was • Taxes: Laws simplified resulting in better compliance and ease of tax payment
• Infrastructure: Increased investment in infrastructure e.g., Ultra Mega Power Projects
• Liberalization: FDI in key sectors like airports, NBFCs, Insurance, electrical equipments,