What is the contribution of industry to national economy in India? Compare it with the
East-Asian countries. What is the desire growth and present position of industry in GDP?
1 Indian Mineral Industry & National Economy
NATIONAL ECONOMY
T
he Indian economy grew robustly in the
current financial year, i.e. 2010-11, and was
on a firmer footing. With growth in 2010-11
estimated at 8.6% (as per the advance estimates
released on 7 February 2011) and 8.0% in 2009-10
(as per quick estimates released on 31.1.2011), the
turnaround from the slowdown caused by the
global financial crisis of 2007-09 has been fast and
strong. Growth in 2010-11 is strong with a
rebound in agriculture and continued momentum
in manufacturing.
Gross Domestic Product (GDP) is an important
key indicator by which a nation’s economic
performance is gauged. Economic policies bring
about pronounced changes in the industrial
climate, foreign trade, domestic and international
taxation policies, monetary exchange rates, etc.,
that have overarching effects on the overall
growth of an economy. As per advance estimates,
India's GDP growth rate at factor cost (at constant
2004-05 prices) touched 8.6% in 2010-11 as
against 9.3% in 2007-08, 6.8% in 2008-09 and as
per quick estimates 8.0% in 2009-10.
Economic parameters as per advance
estimates published in Economic Survey 2010-11
reveal that the GDP in 2010-11 at current market
prices and at factor cost at constant 2004-05 prices
was Rs. 7877,947 crore and Rs. 4879,232 crore,
respectively. The estimated level of growth in the
GDP at constant 2004-05 prices at factor cost (real
GDP) in 2010-11 was composed of growth of 5.4%
in agriculture which rebounded from a downturn
in the previous year; growth of 8.1% in industry
which had a growth of 8.0% in 2009-10; and a
decelerated growth of 9.6% in services as against
10.1% in 2009-10.
Growth in the industrial sector as per the Index
of Industrial Production (IIP) was buoyant during
the first two quarters of 2010-11. The
manufacturing sector, in particular, showed a
remarkable robust growth at rates of 12.6% and
9.9%, respectively, during these two quarters.
Thereafter, industrial output growth has begun
to moderate. India's post recovery industrial
output growth has been largely driven by a few
sectors such as the automotive sector along with
a revival in cotton textiles, leather, food products
and metal products. Some sectors have shown
extreme month-on-month output volatility.
Weighted contribution of manufacturing, mining
and electricity sector during April-December 2010
was 90%, 6% and 4% as against their weight of
88%, 7% and 5%, respectively, in the IIP.
Six core industries namely, crude oil,
petroleum refinery products, coal, electricity,
cement and finished carbon steel that have a
combined weight of 26.7% in the IIP have a large
bearing on infrastructure. They registered a
growth of 5.3% (provisional) during AprilDecember 2010-11 as against 4.7% during the
corresponding period of the previous year.
Electricity generation by power utilities
during 2010-11 was targeted to go up by 7.7% to
830.757 billion kWh. The growth of power
generation during April-December 2010 was about
4.5% as compared to about 6.2% during AprilDecember 2009. The generation from nuclear,
hydro and thermal units registered growth of 33%,
8% and 3%, respectively, during April-December
2010. During this period, the peak and total energy
deficits came down to 10.2% and 8.8%,
respectively, from 12.6% and 9.8% during the
corresponding period in the previous year, mainly
due to growth of availability of power exceeding
the growth in its requirement.
India's trade growth (in US dollar terms) has
been robust at 20% plus since 2002-03. While
India's trade growth has a strong corelation with
world trade growth, it has been significantly
higher than world trade growth following the 1990
reforms and then after 2003. The global recession
only slightly jolted the continued upward growth
in India's export sector with exports rising at a
reasonable rate of 13.6% in 2008-09. The
compound annual growth rate (CAGR) for India's
merchandise exports for the five-year period
2004-05 to 2008-09 increased to 22% from the 14%