Growth Rate in India

The growth rate of an economy is the annual rate of change, which depends on the increase or decrease of the country’s GDP. The rate of growth is mainly used to measure the slowdown or expansion of a country’s economy. If there is a decline in income within a country for two consecutive quarters, this decline shows that the country is in recession. The expansion of the economy of a country is measured by the increasing income of that country, which is seen within two consecutive quarters.

GDP growth comparison in India: 2026

India’s real GDP growth projections for 2026 can be understood on the basis of data from 2016 to 2021. It shows the total market value of goods and services produced within a country per year. It also shows the strength of the country’s economy. Real GDP is considered the basis for adjustment of price changes, which is also an indicator of economic growth. If seen on the basis of GDP growth rate comparison, India’s real GDP growth was around -7.25 per cent in 2020 compared to the previous year.

BRIC countries Brazil, Russia, India and China have seen changes in the economy in recent years, and the growth rate of GDP of these countries is compared to that of the USA and Germany. Despite the worldwide slowdown, India’s GDP growth rate is comparable, so it has managed to register an impressive GDP growth rate.

Many parts of the world have seen negative growth during this period, partly due to skyrocketing inflation, which slowed GDP growth. The GDP growth rate compared to other countries was better due to the expansion of India’s workforce in the industry and services sectors. Also, the increase in international outsourcing provided a major role in the GDP growth rate. India is still known as a global power in the agriculture sector, which plays a main role in the production of wheat or tea.

What Are GDP Growth Rates, and How Do They Affect You?

GDP growth rates are the percentage changes in a certain variable over time. The GDP measures a country’s economic health. It indicates the total value of all commodities and services produced inside a country’s borders over a given time period. Economists can use GDP to evaluate if a country’s economy is expanding or contracting. Expected forward-looking and trailing growth rates are two common forms of growth rates utilised in the analysis.

The main factors hindering economic development are human resources, physical capital, natural resources, and technology, by paying attention to which the economy of the country can be improved.

How to Figure Out Growth Rates

There are many ways to calculate the growth rate, which mainly depend on the data that has to be expressed. The growth rate can be found simply by dividing the difference between the ending and opening price by the opening price, or EV-BV/BV. We use this formula to calculate the economic growth rate for a country’s GDP:

Economic Growth = (GDP)₂– (GDP)₁ / (GDP)₁

GDP = Gross Domestic Product of Nation

Compound annual growth rate (CAGR)

This is commonly referred to as the compound annual growth rate, which is primarily designed to describe the rate at which an investment grows. It is not a real rate of return. It is reinvested on profits every year and increases at the same.

CAGR = (EV/BV)^1/n – 1

Where, EV = Ending Value, BV = Beginning Value , and n = Number of Years

Main Factors Affecting GDP

There are many factors affecting GDP growth rate, including leisure preference, non-marketing activities, underground economy, environmental quality and resource constraints, quality of life, poverty and economic inequality.

Natural resources

The exploration of natural resources, primarily oil and minerals, play a major role in promoting economic development. Apart from this, land, water, forest, and natural gas among other resources are also very important in economic development. In reality, economic development is impossible in a country without natural resources, which can be protected and developed.

Physical capital or infrastructure

Physical capital or infrastructure is also the main resource in the economic development of a country, which is used as economic activity by increasing investment in factories, machinery and roads. Better factories and machinery rather than manual labour make their main contribution in meeting this need, which increases the GDP of any country.

Population or Labor

The availability of workers or employees is also the main resource in the economic development of a country, which helps in the economic development of the country. It is used as a workforce, but the increasing population also increases unemployment.

Conclusion

Economic development is very important for the long term development of a country with a healthy economy. It has both positive and negative impacts on the level of national income and employment and helps in improving the standard of living. The growing GDP of a country can be directly attributed to the increase in production and employment opportunities. The main benefit of high economic growth is additional tax income for government spending, which makes the government’s economy grow. It also helps in reducing the budget deficit.