logging in or signing up Business Environment manavazhagan Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 824 Category: Business & Fin.. License: All Rights Reserved Like it (2) Dislike it (0) Added: August 05, 2009 This Presentation is Public Favorites: 1 Presentation Description No description available. Comments Posting comment... By: premjangir25 (19 month(s) ago) helo can you kindly send this ppt on my email id "premjangir25@rediffmail.com" as a ppt file as i cant download this in power point file. looking forward to your support. Thanks Saving..... Post Reply Close Saving..... Edit Comment Close By: pogiko (31 month(s) ago) i need it now plss Saving..... Post Reply Close Saving..... Edit Comment Close By: pogiko (31 month(s) ago) can i download this nice ppt Saving..... Post Reply Close By: manavazhagan (31 month(s) ago) please send your email id so that i can send you a copy of this PPT. My id is manavazhaganr@bsnl.in Saving..... Edit Comment Close Premium member Presentation Transcript Economic Indicators : Economic Indicators Module-2 12/14/2008 1 manavazhaganr@bsnl.in How an Economy Works / Market Structure of Economy : How an Economy Works / Market Structure of Economy An Economy consists of : Household Sector– Consumers & Suppliers of factors of production & Entrepreneurship Business Sector - All Producing units which draws factors of production and converts into finished goods for consumption Financial Sector - Banks & Financial institutions acting as intermediaries between Household & business Government - Producer of Legislative,Administrative & Judicial services which are consumed by other 3 sectors 12/14/2008 2 manavazhaganr@bsnl.in How an Economy Works / Market Structure of Economy : How an Economy Works / Market Structure of Economy Transaction between the four sectors and between the other economies HH- B : HH receives Factor rewards and spends on purchase of goods HH- F-B : Capital formation, cost of capital paid by Business B-G : Subsidy, Taxes HH- G : Services, Taxes B_- World , H-World , G-World – Export, Import, Consultancy, Tariff Net of all these transactions is Economic Growth or Economic Downturn 12/14/2008 3 manavazhaganr@bsnl.in What is an Economic Indicator : What is an Economic Indicator A Variable which reflects the overall state of an economy. The Key indicators are : GDP Sectoral Shares Agricultural output Electricity Generation Rate of Inflation Money supply Foreign Trade Foreign Exchange Reserves Exchange Rate Economic Infrastructure Social Trends Sources Central Statistical organisation Office of Registrar General Reserve Bank Planning Commission Labour Bureau National Sample Survey Organisation 12/14/2008 4 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Gross Domestic Product: GDP is the total price of Goods and Services made in an Economy It is an indicator of overall health of Economy Usually reported in Percent Importance: Economists : Whether economy is heading North or South Business : Business Plan, Hiring decisions, Sales forecast Government : Review economic policies Household : Investment decisions 12/14/2008 5 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Types of GDP: 1. Based on Current Prices – Nominal GDP 2. Based on Constent Price – Real GDP Nominal GDP – Value of goods and services at current price Real GDP – Physical Quantity of goods and service produced Eg. A hat manufacturer announces that it made Rs.100000 selling hats this year 11% more than the previous year. How they made more money? By selling more hats or By selling at increased price If the more money is due to increased price then in real terms the true volume of hats sold this year was no more than Rs.90090 12/14/2008 6 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Interpretation of Real Vs Nominal GDPs: Real GDP – Higher if the quantity of goods and services are produced more - Higher Real GDP improves Standard of living Nominal GDP – Higher due to inflation - Higher Nominal GDP erodes Standard of living Calculating GDP: Product wise: Calculating the total production Income wise: Calculating the total incomes received by factors of production - labour & capital Expenditure wise: Calculating the total expenditure of all the entities All the GDP calculations should be theoretically equal. Practically it will not be so In India we used product method, but recently we switched over to Expenditure method 12/14/2008 7 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Calculating GDP: Y = C + I + G + (X-M) Y - Income (or GDP)C- Consumption (or Private Final Consumption Expenditure).I- Investment (or Gross Final Consumption Exp)X- ExportsM- Imports G- Government Consumption Private Consumption Household expenditure It constitutes 70% of GDP Less spending – Recession Durable Goods- Less income postpone purchase – Volatile demand – 15% of GDP Non durables – Part of daily living Stable spending - 30 % of GDP Services – Stable spending- 60 % of 12/14/2008 8 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Calculating GDP: Y = C + I + G + (X-M) Y - Income (or GDP)C- Consumption (or Private Final Consumption Expenditure).I- Investment (or Gross Final Consumption Exp)X- ExportsM- Imports G- Government Consumption Private Investment Business - Voltile It constitutes 15% of GDP Less spending – Recession Fixed assets - Less income postpone purchase – Volatile demand Change in private Inventory – add inventory- Fluctuates 12/14/2008 9 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Net Export Export – Import Government Spending Military, Infrastructure 12/14/2008 10 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP What do the two kinds of GDP approaches tell me? The Product approach tells me how much each sector is growing and contributing to GDP. For instance, whenever we read agriculture growing by this much, services by this much etc this approach is used. The expenditure approach tells me whether GDP growth is happening via consumption or investment. Consumption contributes most to the GDP. PFCE is 62% of GDP in 2004-05 and has decreased to 58% in 2006-07. Investment has been rising and has increased from 26% in 04-05 to 28% in 06-07. India needs to move more to investment driven growth and we see that happening. However, magnitude of shift is pretty small. 12/14/2008 11 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP GDP deflator It is the price index number which can be applied to nominal GDP to remove the effect of inflation Example GDP of a country rises from Rs. 300 billion in 2006 to Rs.390 bn in 2007. Assume that the general price level rises by 20% . Find the real GDP If the year 2006 is taken as base year then the price index is 100 in 2006 and 120 in 2007. The GDP deflator is 120/100 = 1.2. The real or inflation adjusted GDP value for 2007 is 390/1.2=Rs.325bn. Thus the nominal GDP rises by 30% (( 390-300)/300)*100, but in real terms it rises by 8.3 % (( 325-300)/300)*100 Real GDP = nominal GDP / Deflator GDP Deflator= Nominal / Real 12/14/2008 12 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Exercise: Indian economy is valued at $1 Trillion. If the people are to get the feeling of economic prosperity India’s GDP should grow at 3.5%. Then How much of goods & services should be produced in India? Below this GDP growth what will happen ? If the economy grows at 7% what will happen ? How fast can an economy grow without causing inflation ? If GDP growth rate = Rise of Productivity + the growth in the labour force then economy growth will not cause inflation. Exercise: The productivity of indian economy is 4% and labour force growth is 2.5%. At what rate economy should grow without breaking into inflation ? 12/14/2008 13 manavazhaganr@bsnl.in Economic IndicatorsGDP - Growth : Economic IndicatorsGDP - Growth India: 1947- 1980 – Phase-I – ‘Hindu rate of Growth ‘ -3.0 - 3.5%- Mixed economy - USSR 1980-1990 - Phase-II- Pro-business policy – removing certain impediments to the functioning of private sector- 5-6% 1990 – Liberalisation policy – 9% Employment Unorganised sector – 60% of GDP Unorganised sector – 93% of empl ( 309mn) Organised Sector – 7% of emp (28mn) Labour force growth – 2-2.5% annum 8.1 mn youths coming out of school system and growing around 5% / yr. 12/14/2008 14 manavazhaganr@bsnl.in Economic IndicatorsGNP & GDP : Economic IndicatorsGNP & GDP Gross National Product GNP records goods and services produced by Indian companies regardless of the place of production and excludes production by foreign companies in India. Goods & Services produced only by Indian Company in India or in Foreign Country Now GNP is called Gross National Income (GNI) Gross Domestic Product GDP records goods and services produced only in Indian territory regardless of whether it is an Indian company or Foreign company. Goods & services produced Only in India 12/14/2008 15 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP : Economic IndicatorsGNI & GDP Which of the following are Indian Companies: Reliance Industries Hindustan Unilever Lever CoCa-Cola Big Bazzar Spencers Pepsi Maruti Nirma Suzlon L&T 12/14/2008 16 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP : Economic IndicatorsGNI & GDP 12/14/2008 17 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development World Bank classifies countries based on percapitaGNI as : Low -Income Lower Middle Income Upper – Middle Income High – Income In 2005 India- GNI = $790mn Percapita GNI- $720 Percapita GNI- $3460(PPP) World – GNI = $44983 World Percapita GNI- $9420 12/14/2008 18 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development World Bank classifies countries based on percapitaGNI as : Low -Income Lower Middle Income Upper – Middle Income High – Income In 2005 India- GNI = $790mn Percapita GNI- $720 Percapita GNI- $3460(PPP) World – GNI = $44983 World Percapita GNI- $9420 12/14/2008 19 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development The difference between Economc Growth & Development : Economic IndicatorsEconomic Growth & Development The difference between Economc Growth & Development Economic Growth Increase in Potential output Increase in Asset Measured in GDP Economic Development Increase in Human capital ( Skill, Innovation, productivity) + Increase in Social Capital ( Health, House,education,sanitation,women,nutrition,) + Rising share of Industry & services Measured in Per-capita Income / Percapita GNI 12/14/2008 20 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development Developing Country Less Developed Country Least Developed countries- Butan , Nepal,Bangladesh,Zambia,Zimbabwe,Yemen. Newly Industrialised / Newly industrialising countries – asian Tigers ( Honkong,S.Koria,Singapore,Taiwan, Transission economies – East Europ Increase in Potential output Increase in Asset Measured in GDP Developed countries Implications : 12/14/2008 21 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development Poverty Subsists on less than $1 / day 1990 -28 % now-21% If GDP growth is maintained – to 10% Developed countries Implications : 12/14/2008 22 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP - 2003 : Economic IndicatorsGNI & GDP - 2003 12/14/2008 23 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares : Economic IndicatorsSectoral Shares The sectoral shares of GDP indicate the type and nature of economy. Economy is divided into Agrarian, Manufacturing & Service economy based on the type & nature of share of Sectors. Agrarian Economy – Percentage of agriculture production will be more than other sectors. Features of Agrarian Economy Agri contributes >60 % Employ Large % of population Low income economy Slow developing economy 12/14/2008 24 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares : Economic IndicatorsSectoral Shares 12/14/2008 25 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agriculture : Economic IndicatorsSectoral Shares- Agriculture Effect on Economy: Receives inputs from fertilizer, Pesticides, Machineries, Infrastructure, warehousing, Hybrid seeds, Irrigation, Land Outputs - Raw material for Food processing , Agro-industries, Feed for live stock & poultry Productivity Employment Export / Import Foreign Exchange Earnings / Expenditure Soil erosion Food security 12/14/2008 26 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank 1. Agricultural Productivity: Measured by the ratio of value added per unit of output to the number of agricultural workers Value added = value of Output in constant price - value of input in constant price 12/14/2008 27 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank 2. Crop Production Index: Shows agricultural production for each period relative to the base year 1999-2001. This does not include fodder crops. 3. Food Production Index: Shows production of food crops that are edible and contain nutrients. Coffee, Tea are excluded as they do not have nutrient values. 4. Livestock Production Index: Shows production of meat, milk, dairy products such as cheese, eggs,honey,raw silk,wool hides & skins . 5. Cereal yield Index Shows production of wheat, rice, maize, barley, oats, millet , sorghum. Measured in production per hectare of harvested land. 12/14/2008 28 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Inputs –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Inputs –FAO of World Bank 12/14/2008 29 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Output &Productivity –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Output &Productivity –FAO of World Bank 12/14/2008 30 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Plan Outlay : Economic IndicatorsSectoral Shares- Agricultural Plan Outlay 12/14/2008 31 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Food subsidy : Economic IndicatorsSectoral Shares- Food subsidy 12/14/2008 32 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Manufacturing : Economic IndicatorsSectoral Shares- Manufacturing Manufacturing Economy – Structure of Manufacturing Economy Food, Beverages & Tobaco Textiles & Clothing Machinery Transport Equipments Chemicals Other Manufacturing - Wood,Paper,,Basic metal,mineral and their relatd products 12/14/2008 33 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Manufacturing Output & Value added –FAO of World Bank : Economic IndicatorsSectoral Shares- Manufacturing Output & Value added –FAO of World Bank 12/14/2008 34 manavazhaganr@bsnl.in Economic IndicatorsElectricity Generation : Economic IndicatorsElectricity Generation Cost of Electricity – Influence Profit Margin Power interruption - causes excess capacity India- 537 Bn MW Production 43% of population has access to electricity 12/14/2008 35 manavazhaganr@bsnl.in You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
Business Environment manavazhagan Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 824 Category: Business & Fin.. License: All Rights Reserved Like it (2) Dislike it (0) Added: August 05, 2009 This Presentation is Public Favorites: 1 Presentation Description No description available. Comments Posting comment... By: premjangir25 (19 month(s) ago) helo can you kindly send this ppt on my email id "premjangir25@rediffmail.com" as a ppt file as i cant download this in power point file. looking forward to your support. Thanks Saving..... Post Reply Close Saving..... Edit Comment Close By: pogiko (31 month(s) ago) i need it now plss Saving..... Post Reply Close Saving..... Edit Comment Close By: pogiko (31 month(s) ago) can i download this nice ppt Saving..... Post Reply Close By: manavazhagan (31 month(s) ago) please send your email id so that i can send you a copy of this PPT. My id is manavazhaganr@bsnl.in Saving..... Edit Comment Close Premium member Presentation Transcript Economic Indicators : Economic Indicators Module-2 12/14/2008 1 manavazhaganr@bsnl.in How an Economy Works / Market Structure of Economy : How an Economy Works / Market Structure of Economy An Economy consists of : Household Sector– Consumers & Suppliers of factors of production & Entrepreneurship Business Sector - All Producing units which draws factors of production and converts into finished goods for consumption Financial Sector - Banks & Financial institutions acting as intermediaries between Household & business Government - Producer of Legislative,Administrative & Judicial services which are consumed by other 3 sectors 12/14/2008 2 manavazhaganr@bsnl.in How an Economy Works / Market Structure of Economy : How an Economy Works / Market Structure of Economy Transaction between the four sectors and between the other economies HH- B : HH receives Factor rewards and spends on purchase of goods HH- F-B : Capital formation, cost of capital paid by Business B-G : Subsidy, Taxes HH- G : Services, Taxes B_- World , H-World , G-World – Export, Import, Consultancy, Tariff Net of all these transactions is Economic Growth or Economic Downturn 12/14/2008 3 manavazhaganr@bsnl.in What is an Economic Indicator : What is an Economic Indicator A Variable which reflects the overall state of an economy. The Key indicators are : GDP Sectoral Shares Agricultural output Electricity Generation Rate of Inflation Money supply Foreign Trade Foreign Exchange Reserves Exchange Rate Economic Infrastructure Social Trends Sources Central Statistical organisation Office of Registrar General Reserve Bank Planning Commission Labour Bureau National Sample Survey Organisation 12/14/2008 4 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Gross Domestic Product: GDP is the total price of Goods and Services made in an Economy It is an indicator of overall health of Economy Usually reported in Percent Importance: Economists : Whether economy is heading North or South Business : Business Plan, Hiring decisions, Sales forecast Government : Review economic policies Household : Investment decisions 12/14/2008 5 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Types of GDP: 1. Based on Current Prices – Nominal GDP 2. Based on Constent Price – Real GDP Nominal GDP – Value of goods and services at current price Real GDP – Physical Quantity of goods and service produced Eg. A hat manufacturer announces that it made Rs.100000 selling hats this year 11% more than the previous year. How they made more money? By selling more hats or By selling at increased price If the more money is due to increased price then in real terms the true volume of hats sold this year was no more than Rs.90090 12/14/2008 6 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Interpretation of Real Vs Nominal GDPs: Real GDP – Higher if the quantity of goods and services are produced more - Higher Real GDP improves Standard of living Nominal GDP – Higher due to inflation - Higher Nominal GDP erodes Standard of living Calculating GDP: Product wise: Calculating the total production Income wise: Calculating the total incomes received by factors of production - labour & capital Expenditure wise: Calculating the total expenditure of all the entities All the GDP calculations should be theoretically equal. Practically it will not be so In India we used product method, but recently we switched over to Expenditure method 12/14/2008 7 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Calculating GDP: Y = C + I + G + (X-M) Y - Income (or GDP)C- Consumption (or Private Final Consumption Expenditure).I- Investment (or Gross Final Consumption Exp)X- ExportsM- Imports G- Government Consumption Private Consumption Household expenditure It constitutes 70% of GDP Less spending – Recession Durable Goods- Less income postpone purchase – Volatile demand – 15% of GDP Non durables – Part of daily living Stable spending - 30 % of GDP Services – Stable spending- 60 % of 12/14/2008 8 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Calculating GDP: Y = C + I + G + (X-M) Y - Income (or GDP)C- Consumption (or Private Final Consumption Expenditure).I- Investment (or Gross Final Consumption Exp)X- ExportsM- Imports G- Government Consumption Private Investment Business - Voltile It constitutes 15% of GDP Less spending – Recession Fixed assets - Less income postpone purchase – Volatile demand Change in private Inventory – add inventory- Fluctuates 12/14/2008 9 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Net Export Export – Import Government Spending Military, Infrastructure 12/14/2008 10 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP What do the two kinds of GDP approaches tell me? The Product approach tells me how much each sector is growing and contributing to GDP. For instance, whenever we read agriculture growing by this much, services by this much etc this approach is used. The expenditure approach tells me whether GDP growth is happening via consumption or investment. Consumption contributes most to the GDP. PFCE is 62% of GDP in 2004-05 and has decreased to 58% in 2006-07. Investment has been rising and has increased from 26% in 04-05 to 28% in 06-07. India needs to move more to investment driven growth and we see that happening. However, magnitude of shift is pretty small. 12/14/2008 11 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP GDP deflator It is the price index number which can be applied to nominal GDP to remove the effect of inflation Example GDP of a country rises from Rs. 300 billion in 2006 to Rs.390 bn in 2007. Assume that the general price level rises by 20% . Find the real GDP If the year 2006 is taken as base year then the price index is 100 in 2006 and 120 in 2007. The GDP deflator is 120/100 = 1.2. The real or inflation adjusted GDP value for 2007 is 390/1.2=Rs.325bn. Thus the nominal GDP rises by 30% (( 390-300)/300)*100, but in real terms it rises by 8.3 % (( 325-300)/300)*100 Real GDP = nominal GDP / Deflator GDP Deflator= Nominal / Real 12/14/2008 12 manavazhaganr@bsnl.in Economic IndicatorsGDP : Economic IndicatorsGDP Exercise: Indian economy is valued at $1 Trillion. If the people are to get the feeling of economic prosperity India’s GDP should grow at 3.5%. Then How much of goods & services should be produced in India? Below this GDP growth what will happen ? If the economy grows at 7% what will happen ? How fast can an economy grow without causing inflation ? If GDP growth rate = Rise of Productivity + the growth in the labour force then economy growth will not cause inflation. Exercise: The productivity of indian economy is 4% and labour force growth is 2.5%. At what rate economy should grow without breaking into inflation ? 12/14/2008 13 manavazhaganr@bsnl.in Economic IndicatorsGDP - Growth : Economic IndicatorsGDP - Growth India: 1947- 1980 – Phase-I – ‘Hindu rate of Growth ‘ -3.0 - 3.5%- Mixed economy - USSR 1980-1990 - Phase-II- Pro-business policy – removing certain impediments to the functioning of private sector- 5-6% 1990 – Liberalisation policy – 9% Employment Unorganised sector – 60% of GDP Unorganised sector – 93% of empl ( 309mn) Organised Sector – 7% of emp (28mn) Labour force growth – 2-2.5% annum 8.1 mn youths coming out of school system and growing around 5% / yr. 12/14/2008 14 manavazhaganr@bsnl.in Economic IndicatorsGNP & GDP : Economic IndicatorsGNP & GDP Gross National Product GNP records goods and services produced by Indian companies regardless of the place of production and excludes production by foreign companies in India. Goods & Services produced only by Indian Company in India or in Foreign Country Now GNP is called Gross National Income (GNI) Gross Domestic Product GDP records goods and services produced only in Indian territory regardless of whether it is an Indian company or Foreign company. Goods & services produced Only in India 12/14/2008 15 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP : Economic IndicatorsGNI & GDP Which of the following are Indian Companies: Reliance Industries Hindustan Unilever Lever CoCa-Cola Big Bazzar Spencers Pepsi Maruti Nirma Suzlon L&T 12/14/2008 16 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP : Economic IndicatorsGNI & GDP 12/14/2008 17 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development World Bank classifies countries based on percapitaGNI as : Low -Income Lower Middle Income Upper – Middle Income High – Income In 2005 India- GNI = $790mn Percapita GNI- $720 Percapita GNI- $3460(PPP) World – GNI = $44983 World Percapita GNI- $9420 12/14/2008 18 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development World Bank classifies countries based on percapitaGNI as : Low -Income Lower Middle Income Upper – Middle Income High – Income In 2005 India- GNI = $790mn Percapita GNI- $720 Percapita GNI- $3460(PPP) World – GNI = $44983 World Percapita GNI- $9420 12/14/2008 19 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development The difference between Economc Growth & Development : Economic IndicatorsEconomic Growth & Development The difference between Economc Growth & Development Economic Growth Increase in Potential output Increase in Asset Measured in GDP Economic Development Increase in Human capital ( Skill, Innovation, productivity) + Increase in Social Capital ( Health, House,education,sanitation,women,nutrition,) + Rising share of Industry & services Measured in Per-capita Income / Percapita GNI 12/14/2008 20 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development Developing Country Less Developed Country Least Developed countries- Butan , Nepal,Bangladesh,Zambia,Zimbabwe,Yemen. Newly Industrialised / Newly industrialising countries – asian Tigers ( Honkong,S.Koria,Singapore,Taiwan, Transission economies – East Europ Increase in Potential output Increase in Asset Measured in GDP Developed countries Implications : 12/14/2008 21 manavazhaganr@bsnl.in Economic IndicatorsEconomic Growth & Development : Economic IndicatorsEconomic Growth & Development Poverty Subsists on less than $1 / day 1990 -28 % now-21% If GDP growth is maintained – to 10% Developed countries Implications : 12/14/2008 22 manavazhaganr@bsnl.in Economic IndicatorsGNI & GDP - 2003 : Economic IndicatorsGNI & GDP - 2003 12/14/2008 23 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares : Economic IndicatorsSectoral Shares The sectoral shares of GDP indicate the type and nature of economy. Economy is divided into Agrarian, Manufacturing & Service economy based on the type & nature of share of Sectors. Agrarian Economy – Percentage of agriculture production will be more than other sectors. Features of Agrarian Economy Agri contributes >60 % Employ Large % of population Low income economy Slow developing economy 12/14/2008 24 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares : Economic IndicatorsSectoral Shares 12/14/2008 25 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agriculture : Economic IndicatorsSectoral Shares- Agriculture Effect on Economy: Receives inputs from fertilizer, Pesticides, Machineries, Infrastructure, warehousing, Hybrid seeds, Irrigation, Land Outputs - Raw material for Food processing , Agro-industries, Feed for live stock & poultry Productivity Employment Export / Import Foreign Exchange Earnings / Expenditure Soil erosion Food security 12/14/2008 26 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank 1. Agricultural Productivity: Measured by the ratio of value added per unit of output to the number of agricultural workers Value added = value of Output in constant price - value of input in constant price 12/14/2008 27 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Indicators –FAO of World Bank 2. Crop Production Index: Shows agricultural production for each period relative to the base year 1999-2001. This does not include fodder crops. 3. Food Production Index: Shows production of food crops that are edible and contain nutrients. Coffee, Tea are excluded as they do not have nutrient values. 4. Livestock Production Index: Shows production of meat, milk, dairy products such as cheese, eggs,honey,raw silk,wool hides & skins . 5. Cereal yield Index Shows production of wheat, rice, maize, barley, oats, millet , sorghum. Measured in production per hectare of harvested land. 12/14/2008 28 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Inputs –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Inputs –FAO of World Bank 12/14/2008 29 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Output &Productivity –FAO of World Bank : Economic IndicatorsSectoral Shares- Agricultural Output &Productivity –FAO of World Bank 12/14/2008 30 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Agricultural Plan Outlay : Economic IndicatorsSectoral Shares- Agricultural Plan Outlay 12/14/2008 31 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Food subsidy : Economic IndicatorsSectoral Shares- Food subsidy 12/14/2008 32 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Manufacturing : Economic IndicatorsSectoral Shares- Manufacturing Manufacturing Economy – Structure of Manufacturing Economy Food, Beverages & Tobaco Textiles & Clothing Machinery Transport Equipments Chemicals Other Manufacturing - Wood,Paper,,Basic metal,mineral and their relatd products 12/14/2008 33 manavazhaganr@bsnl.in Economic IndicatorsSectoral Shares- Manufacturing Output & Value added –FAO of World Bank : Economic IndicatorsSectoral Shares- Manufacturing Output & Value added –FAO of World Bank 12/14/2008 34 manavazhaganr@bsnl.in Economic IndicatorsElectricity Generation : Economic IndicatorsElectricity Generation Cost of Electricity – Influence Profit Margin Power interruption - causes excess capacity India- 537 Bn MW Production 43% of population has access to electricity 12/14/2008 35 manavazhaganr@bsnl.in