GDP which stands for Gross Domestic Product is the best way to amount the

economy of a nation. To put it simply, GDP is the total value of everything or

anything that is produced by people and companies in the country.
GDP has a huge impact on personal finances, job growth and inflation rates.
When comparing the economies of two nations, GDP is used as a differentiating
basis.
Currently Indias GDP is 2.454 trillion USD.

The GDP of India has following key components-

1. IT Sector- IT sector has increased Indias GDP from 1.2% in 1998 to 7.5%
in 2012. Companies like TCS and Wipro are among the leading technology
companies in the world.

2. Agriculture- India ranks second worldwide in farm output, although

agriculture being the major source of income for many Indians but
agricultures role to GDP has decreased in the recent years due to increase
in skilled labor which works in in IT industry and various other engineering
sectors.

3. Tourism- Tourism contributed to 6.3% of Indian GDP in 2015. India being

a diverse geographic country is a hot spot for tourism and a lot of revenue
is generated from it.

4. Engineering Sector- It includes transport sector, machine tools,

automotive industries etc. Indias engineering sector exported 67 billion
dollars worth of goods in 2014. It plays a major role in Indias GDP.

One macroeconomic indicator which I am selecting is

Inflation-

Inflation happens the prices of commodities and services are increased. Inflation
rate of India was 3.78% in 2015 which is substantially lower than the inflation
rate in 2011 which was 9.6%. Inflation depends on various factors-

1. Demand Factors- It basically occurs in a situation when the total

demand in the economy has exceeded the collective supply.
 2. Supply Factors- Supply is the major reason of inflation in India. If the
supply of labour is low, it increases the cost of a commodity. If there is
agricultural scarcity, it creates inflationary pressures.

3. Domestic factors- Developing countries like India have less developed

markets as compared to developed markets in which supply of money
grows rapidly while the supply of goods and services takes time.

I think the reduction in the inflation rates is beneficial to people because it is

ultimately the common people who have to pay for the commodities and
inflation rates being decreased show a good governance of the government of
India and the practical economic policies that the government has implemented.

Various macroeconomic indicators and their effects

Unemployment- The rate of unemployment grew from a rate of 3.8% in 2011 to

5% in 2016. The main reason behind it is the lack of performance from
agricultural, construction and information technology sector which are the main
sectors that create jobs. Unemployment often leads to decrease in consumer
confidence and economic savings of people. It leads to the following-
1. Waste of Human Resources as people (specially youth) waste their time
searching for jobs.
2. Unemployment also leads to increased rate of poverty.
3. The social effects of unemployment are increased levels of theft,
gambling and bribery in the society.

Human Development Index(HDI)- Human Development Index is used to

measure economic growth in terms of income, health and education. India
slipped from a rank of 130 to a rank of 131 among the 188 countries which are
marked in terms of HDI as economic indicator.

1. Health-In terms of health, India isnt in a strong position right now, people
dont have much confidence in the health care system of India. The public
sector spent only 1.1% on health as a percentage of GDP. It is pretty bad.
Countries like USA spend at least 5% to 6% of GDP on health services.
2. Literacy- Literacy and education is the key for socio economic
development. Indian literacy rate has increased from 12% in 1947 at the
time of independence to 74% today, Kerala having the highest literacy
rate. Increase in literacy rate has increased skilled workers which has led
to development of engineering and information technology sectors in
India. Also, increase in literacy levels increases the confidence of people
in society.