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Apr 15, 20140 comments

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Disclaimer:- All the Information provided in this post are prepared & compiled by A. Praveen Kumar, SPM, Papannapet SO-502303, Telangana State  for in good faith of Postal Assistant Exam Aspirants. Author of blog does not accepts any responsibility in relation to the accuracy, completeness, usefulness or otherwise, of contents.

The economy of India is the 11th largest economy in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). Economists predict that by 2020, India will be among the leading economies of the world.

Since 1991, continuing economic liberalisation has moved the economy towards a market-based system. By 2008, India had established itself as the world’s second fastest growing major economy. However, the year 2009 saw a significant slowdown in India’s official GDP growth rate to 6.1% as well as the return of a large projected fiscal deficit of 10.3% of GDP which would be among the highest in the world.

India’s large service industry accounts for 62.6% of the country’s GDP while the industrial and agricultural sector contributes 20% and 17.5% respectively. Agriculture is the predominant occupation in India, accounting for about 52% of employment. The service sector makes up a further 34%, and industrial sector around 14%.

Basic Features of Indian Economy

i. Low per capita income.
ii. Inequalities in income distribution.
iii. Predominance of agriculture
(More than 2/3rd of India’s working population is engaged in agriculture. But in USA, only 2% of the working population is engaged in agriculture).
iv. Rapidly growing population.
v. Chronic unemployment
(A person is considered employed if he / she works for 273 days of a year for eight hours every day).
vi. Low rate of capital formation.
vii. Dualistic Nature of
Economy (features of a modern economy, as well as traditional).
viii. Mixed Economy
ix. Follows Labour Intensive

 The national income is the sum total of the value of all the final goods produced and services of the residents of the country in an accounting year.

Dadabhai Naoroji was the first to calculate the national income of India. Dadabhai Naoroji is known as the Father of Indian Politics and Economics. He is also called the 'Grand Old Man of India'.In his book Poverty and Un British Rule in India he describes his economic theory, i.e. the economic exploitation of India by the British. His theory is popularly called the Economic Drain Theory. First scientific attempt to calculate National Income was done by Dr. VKRV. Rao in 1931-32.

GDPIt in the money value of all the final goods and services produced within the geographical boundaries of the country during a given period of time.

GNPIt refers to the money value of total output or production of find goods and service produced by the nationals of a country during a given period of time. In India Gross Domestic Product (GDP) is larger than national income because net factor income from abroad is negative, i.e. foreign payment is larger than the foreign receipt.

GDP DeflatorThe ratio of nominal to real GDP.

GDP Deflator = Nominal GDP/Real GDP.

Producers Price Indexit is the cost incurred by the producer in producing single unit in terms of GDP. It does not include any indirect taxes. It is used as early warming. It is having effect on the consumer price.

Blue BookAn annual digest published by the UK office of National Statistics containing the national income and expenditure statistics of the UK.
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