In a major relief to the Indian government, the latest economic statistics of India by bean counters in New Delhi indicates that the nation’s economy is gaining momentum and is on the track of recovery. This will be treated as a big deal after the ruling party’s historic political victories in the north-eastern states and an added star to win 2019.
The latest Indian economic data has been released and it says that the economy grew at 7.2% GDP (Gross Domestic Product) in the quarter of December 2017. These numbers show that the fallen economy that it was has gained back the momentum and is well off on the track of recovery after twin shockers from demonetisation and messy transition to new GST system. A so-called stunning 7.2% GDP shines through as the best rate expansion in last five quarters and a full-point 1.5% booster than the bottom rate that it had hit earlier in previous quarter. And the IMF estimates that with this rate of growth, India should grow to 7.4% by the second quarter of 2018.
GDP of any nation is simply the market value of goods and services in the particular nation for a specific period of time – which means, it is generally directly proportional to the economic production and self-consumption amount. That is the reason why GDP is seen as something that gives out the general idea of standard of living in the nation. However, the numbers themselves are pretty misleading indicator as even a small absolute change in the economies of countries with a low GDP base will inflate the percentage figure. Which means, even if there has been a little change, it will ripple out in a larger GDP form.
And since India is the 7th largest economy in the world currently, and due to the massive size, growth rate alone can be misleading to generalise the situation of entire nation. Above 7% GDP growth is certainly good, it is a significant achievement, but it is not the yardstick to measure quality of life of common people in the country. The better yardstick would be GDP per capita, or GDP divided by the population – when applied that for Indian economy, the rate will stand nowhere compared to other nations. For example, the per capita GDP of US is 32 times higher than that of India. So to achieve actual growth, India will have to maintain double-digit growth for years and years. Above 7% not such a huge achievement now, is it? The per capita GDP is what indicates actual growth so the country should focus on actual development, and not just numbers to show.