ECONOMY ANALYSIS

GDP
Indian economy is majorly a consumption driven. India has been experiencing increasing growth
rate, as shown in the following figure, till 2014-15.
In 2015-16, it registered a growth rate of 7.11%, which further fall to 6.72% in 2016-17 as the
effects demonization in the third quarter had disturbed the whole economy.
India is expected to grow at a 7.37% in 2017-18.

SECTORIAL OUTPUT

17.32 Agircuture
sector
Industry Sector
53.66
29.02
Service Sector
UNEMPLOYMENT RATE:
Unemployment Rate in India increased to 3.52 percent in 2017 from 3.51 percent in 2016.
Unemployment Rate in India averaged 4.05 percent from 1983 until 2017, reaching an all time
high of 8.30 percent in 1983 and a record low of 3.41 percent in 2014.

INFLATION:
GDP growth weakened sharply during the global financial crisis (GFC) due to a decline in export
demand from advanced economies and a slump in investment. Nonetheless, activity rebounded
and high inflation became entrenched after the GFC, supported by an increase in government
spending and expansionary monetary policy. GDP growth has trended higher, inflation has come
down, external fragilities (relating to currency volatility and the size of the current account
deficit) have abated and the fiscal position has become more sustainable.

RECENT DEVELOPMENTS
  India's Foreign Direct Investment (FDI) inflows reached US$ 208.99 billion during April
2014 - December 2017, with maximum contribution from services, computer software
and hardware, telecommunications, construction, trading and automobiles.
 Indian companies raised Rs 1.6 trillion (US$ 24.96 billion) through primary market in
2017.
 Employment on net basis in eight key sectors in India including manufacturing, IT and
transport increased by 136,000

GOVERNMENT INITATIVES:

 In March 2018, construction of 321,567 additional houses across 523 cities under the
Pradhan Mantri Awas Yojana (Urban) has been approved by the Ministry of Housing and
Urban Poverty Alleviation, Government of India with an allocation of Rs.18203 crore.
 The Ministry of Power, Government of India has partnered with the Ministry of Skill
Development & Entrepreneurship to provide training to the manpower in six states in an
effort to speed up the implementation of SAUBHAGYA (Pradhan Mantri Sahaj Bijli Har
Ghar Yojna).
 The Union Cabinet gave its approval to the North-East Industrial Development Scheme
(NEIDS) 2017 in March 2018 with an outlay of Rs 3,000 crores (US$ 460 million) up to
March 2020.
 The Government of India has succeeded in providing road connectivity to 85 per cent of
the 178,184 eligible rural habitations in the country under its Pradhan Mantri Gram Sadak
Yojana (PMGSY) since its launch in 2014.
 INDUSTRY ANALYSIS
KEY POINTS

Large contribution to the Indian economy

•India’s IT industry contributed around 7.7 per cent to the country’s GDP. IT industry employs nearly
3.97 million people in India of which 175,000 were added in FY17. The industry added around
1,05,000 jobs in FY18 and is expected to add over 100,000 jobs in FY19.
•IT industry is fueling the growth of startups in India, with the presence of more than 5,200 startups in
India

Strong growth opportunities

•The IT-BPM sector in India expanded at a CAGR of 10.71 per cent to US$ 167 billion in FY18E from
US$ 74 billion in FY10, which is 3–4 times higher than the global IT-BPM growth. It is estimated that
the size of the industry will grow to US$ 350 billion by 2025.

Leading sourcing destination

•India is the leading sourcing destination across the world, accounting for approximately 55 per cent
market share of the US$ 185-190 billion global services sourcing business in 2017-18.
•India acquired a share of around 38 per cent in the overall Business Process Management (BPM)
sourcing market.

Largest pool of ready to hire talent

•India’s highly qualified talent pool of technical graduates is one of the largest in the world, facilitating
its emergence as a preferred destination for outsourcing, computer science/information technology
accounts for the biggest chunk of India' fresh engineering talent pool, with more than 98 per cent of
the colleges offering this stream.

Most lucrative sector for investments

•The sector ranks second in India’s total FDI share. The computer software and hardware sector in
India attracted cumulative Foreign Direct Investment (FDI) inflows worth US$ 30.82 billion between
April 2000 and March 2018, according to data released by the Department of Industrial Policy and
Promotion (DIPP).

Export and employment growth

•Indian IT exports are projected to grow at 7-9 per cent in 2018-19. IT-BPM sector accounts for largest
share in total Indian services export, which is 45 per cent.
PORTER’S FIVE FORCES FRAMEWORK ANALYSIS