India’s economy has become the fastest growing economy in the world. The revised figures released by India’s Ministry of Statistics show the inflation-adjusted economic growth rate for October–December 2014 was at 7.5%, making India the world’s fastest growing economy, overtaking china’s 7.3% growth. The Indian economy is likely to grow at 7.4% in 2014-15, according to the government forecast using the new methodology of calculating the country’s gross domestic product. The new formula encompasses farmlands, infrastructure projects to smartphones sales.
The new method shows that the real growth rate of GDP — the measure of the total value of the goods and services produced in the country in 2013-2014 – was 6.9%, which was higher than the actual estimate of 4.7%.
In a report the credits ratings and research firm CARE said “the difference may be attributed to the GDP being based on value-added concept while the IIP is on production –through the two should ideally converge”
The Paris-based Organisation of Economic Cooperation and Operation (OCED) shows an upward curve in India’s economic growth rate. The growth rates of the US and China are showing a stable momentum, says the OECD.
“The CLI for India indicates firming growth while in Russia the CLI continues to point to a loss in growth momentum,” said the OCED. The CLI in India inched up 99.4 by December end as compared to November 2014. India’s CLI has been rising since august 2014.
Raghuram Rajan, the governor of Reserve Bank of India, the country’s central banker, said recently that the RBI will scrutinise the data. “We do need to spend more time to understand the GDP numbers,” he said after releasing the bi-monthly monetary policy.
India suffered a slow phase of economic growth in the last two years when it had a growth rate of sub-5 percent. The Indian economy has been growing too slow to generate enough job opportunities for the swelling population of the youth entering the labour force.
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