A Project on Study of Economic Indicators and its Impact on India
| Rationale of Study.
| Objective of the study.
| Literature Review.
| Research methodology
| Sample Size.
| Tools and techniques.
| Research tools.
| Procedure & data collection.
| Data analysis and interpretation.
| Suggestions and recommendations.
An Overview of the Indian Economy:
Indian economic policy after independence, influenced by the colonial experience, which was seen by Indian leaders as exploitative in nature, and by their exposure to Fabian socialism, became protectionist in nature. The early policy makers formulated a policy of import substitution, industrialization, state intervention in labour and financial markets, a large public sector, overt regulation of business, and central planning. This led to a low overall average growth rates upto 1980.
The economic reforms that surged economic growth in India after 1980 can be attributed to two stages of reforms. The pro-business reform of 1980 initiated by Indira Gandhi and carried on by Rajiv Gandhi, eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. The economic liberalization of 1991, initiated by then Indian prime minister P. V. Narasimha Rao and his finance minister Manmohan Singh in response to a macroeconomic crisis did away with the Licence Raj (investment, industrial and import licensing) and ended public sector monopoly in many sectors, thereby allowing automatic approval of Foreign Direct Investment (FDI) in many sectors .
The reform process has had some very beneficial effects on the Indian economy, including higher growth rates, lower inflation, and significant increases in foreign investment. The economy of India is now the fourth-largest in the world as measured by purchasing power parity (PPP), with a GDP of US $3.36 trillion. India was the second fastest growing major economy in the world, with a GDP growth rate of 8.1% at the end of the first quarter of 2005–2006. The country's economy is diverse and encompasses agriculture, handicrafts, industries and a multitude of services. Services are the major source of economic growth in India today, though two- thirds of the Indian workforce earn their livelihood directly or indirectly through agriculture. In recent times, India has also capitalized on its large number of highly educated people who are fluent in the English language to become an important location for global companies outsourcing customer service and technical support call centers. It is also a major exporter of skilled workers in software services, financial services, and software engineering.
With the increasing importance of the economy of India, which is now well above the one billion mark in population, monitoring Indian economic cycles is now of more interest
Identifying Potential Economic Indicators
* The choice of economic indicators is a very sensitive issue as the forecast performance depends on the quality of the indicators. The indicators should cover all the broad sectors in the economy, viz., real sector, financial sector, government sector, external sector, etc.
* Silver (1991) suggested the following six criteria to judge the quality of an indicator. The quality of an indicator is judged through some pre-defined criteria, set as per need and purpose of the analysis. In determining the usefulness of an indicator, the traditional National Bureau of Economic Research (NBER) approach applied the following six criteria to a series:
* Economic Significance – How well understood and how important is the role of variables in business cycles? * Statistical Adequacy – How well does the series measure the economic variable or process? *...
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