India’s GDP growth rate to go down by 2%

Topic: India’s GDP

According to recent analysis of Indian Economic status, one of the preferred or favoured measure of Economic Development, Gross Domestic Product (GDP) is estimated to fall by 2% in the 08-09. This fall in GDP is said to have direct impact on two major Economic measure firstly Household Income and second Per Capita Income (PCI).

As a result of 2% fall in GDP, in 2008-09 the reduction in Household Income would be to tune of Rs. 3200 (approx) and in 2009-10 it is predicted to reach Rs 7800 (approx). The loss in Per Capita Income is Rs 650 and Rs 1500 (approx) respectively in  2008-09 and 2009-10.

In reality, the 2% decrease in GDP is the difference between the best and worst case GDP Growth rate predicted by major Financial Research Organisation such as Centre for Monitoring Indian Economy (CMIE) and Goldman Sachs. Goldman Sachs predicted the lowest GDP growth rate for 2 consecutive years 2008-09 and 2009-10 to be around 5-7% while CMIE predicted highest GDP growth rate of around 8%.

Source: Economic Times, November 13, 2008