India GDP growth rate slumps to 5.7 per cent - Comment
GDP is the Gross Domestic Product, which is the financial measure of the market value of the total goods and services in a particular period of time. GDP is considered as the main important growth rate of a country. We can access the growth of a country through GDP rate. It provides the total value of the goods and services of a country. We can find GDP in three ways;
- Production approach
- Income approach
- Expenditure approach
In production approach method the calculations are mainly based on the total output products of a country.
In income method, different manners are considering in this method such as salary,wages,incentives etc..
In expenditure method, expenditure is the basis of this method.
GDP=compensation of employees+gross operating surplus+gross mixed income+taxes less subsidies on production and imports.
Our country is now going through in a very bad condition. Because our GDP rate fallen in the very lowest stage. Around 2 per cent fallen in rate. It shows the under development of a country. Mainly, the decline is caused by two major factors,
The one is "Demonetisation and other is the implementation of GST.
These are adversely affected the economic condition of the country.
The immediate demonetisation process affect the all level performance and activities of the country. According to the latest Central Statistics office, the rate is declined. It affect different sectors of the country such as manufacturing, mining, transport, communication, hotels, trade, real estate and different professional services. The construction and manufacturing sectors was the hardest hit by demonetisation. The construction sector growth was declined from 6 to 3.7 per cent and the manufacturing growth declined from 12.7 to 8.2 in the following periods.
The agriculture sector growth came down to 5.2 per cent from 6.9.
The agriculture sector performance was also affected by the demonetisation and GST. There happen a massive increase in the price of seeds and fertilizers and the farmers are get unable to handle these additional expenses. The major and the principle reason of this decline in a fall in manufacturing sector, which saw a growth of 1.2 per cent during the quarter, sold by the chief statistician T.C.A. Anant. The Gross value added is largely contributed by the private manufacturing sector. The 74 per cent of the GVA comes from the corporate sector. The real estate sector is adversely affected by these reforms because the money funding and transactions are completely dead in this sector mostly. The lands and properties demands are fallen very badly. The Foreign direct investment and foreign institutional investments are dramatically decreased by these decisions.
The GST reform is also made a huge impact in this situation because the massive increase in the price of the basic items of a citizen. So the demand and supply is cut down very pathetically. Share markets and other important markets growths are declined by these reforms. The NIFTY and SENSEX are cut down because of these initiatives. But the other side of GST; it is a transparent tax method because it avoid many other taxes it emphasis single market and single tax method and it's a integrated taxes , it would make possible the taxation burden to be split equitably between manufacturing and services and another important problem is , the GST implementation make garments and cloths could become expensive.
The demonetisation is mainly focus to abolish the black money and corruption. But according to the reserve bank of india; about 99 per cent of money is returned back to the banks. There is a huge amount of expenses incurred in this demonetisation process.
In my opinion , is the demonitisation and GST are successful? ,I think it is not much successful. May be it would success in future but currently it's not much effective.So these are the main problems of the decline of our GDP rate. These all problems must resolve and make our economy with full fire,successful and people friendly
-Sebin Thomas
