Money Penny

India Outlook: Slowdown Ahead?

I agree with Shiv that GDP has already shown significant slow down (net of inflation). Last few years has shown that GDP growth rates is driven primarily by service sector (~72% weighted contribution) while employing less than 8% of the population. In contrast, the agriculture sector has contributed less to GDP growth rates (~10% weight contribution) while close of ~60% population depend on it. Similar gaps can be seen with infrastructure also. This imbalance cannot continue forever. There has to be reversal to mean growth rates. While one can hear in loud speaker of Indian great story, majority of the population is not benefiting from it. The consistent growth rate can be maintained if India addresses all aspects of economy (not just the service sector – primarily driven by exports). If private sector and FII investments go to industrial/service sectors, why can’t govt focus its spending on creating platform/policies for agriculture and infrastructure ?
More data on www.galatime.com/2007/.../