Contribution to Indian GDP growth: Agriculture vs. Industry vs. Services
The Reserve Bank of India (RBI) maintains an excellent website with tons of economic data, speeches by policy makers, etc. Dr. Rakesh Mohan, Deputy Governor, RBI, recently gave a speech titled “Current Challenges to Monetary Policy Making in India”. I found several interesting tables that shed light on the composition of Indian GDP.
Below, you can see that industry & services have grown much faster than agriculture.
However, if we weight the above growth rates by the % of each category’s contribution to the GDP, we see agriculture doing its part. But imagine if servies were a bigger component of the GDP and/or if agricultural growth takes off.
Finally, note the significant increase in bank credit growth since 2000 - and the even larger growth of private sector credit in 2005.
What does this mean? If bank credit growth remains strong (in conjunction with savings rates, FDI, etc), and the agricultural economy booms, we could see Indian GDP maintain or exceed 9-10% annual growth for the foreseeable future!
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