Macro Economic Variables Essay

1132 words - 5 pages

Macroeconomic Indicators from 2006-07 to 2011-12
| 2006-07 | 2007-08 | 2008-09 | 2009-10 | 2010-11 | 2011-12 |
GDP (in crores) | 3953276 | 4582086 | 5303567 | 6091485 | 7157412 | 8279975 |
Growth Rates | 9.6 | 9.3 | 6.7 | 8.4 | 8.4 | 6.9 |
GNP (in crores) | 3920042 | 4561574 | 5270644 | 6053585 | 7078512 | 8198276 |
Growth Rates | 9.5 | 9.7 | 6.5 | 8.4 | 7.9 | 7.0 |
Inflation rates | 6.39 | 8.32 | 10.83 | 12.11 | 8.87 | 9.01 |
Exports( rate of change) | 25.3 | 14.7 | 28.2 | 0.6 | 35.1 | 29.9 |
Imports( rate of change) | 27.3 | 20.4 | 35.8 | -0.8 | 23.4 | 34.5 |
Average Exchange Rates | | | | | | |
45.25 | 40.26 | 45.99 | 47.42 | 45.56 | 51.25 |
WPI (% change) | ...view middle of the document...

There has been a marginal growth in the number of FIIs during the year 2011-12. The FIIs have been net sellers in the Indian equity and the net buyers in the debt market activity during 2011-12. However, there is a decline from 41597 in 2010-11 to 39177 in 2011-12.
Subdued FII inflows into the country led to the decline in Indian markets and contributed to sharp depreciation of the rupee though much of the depreciation was due to ‘flight to safety’ by foreign investors.
Inflation in Indian Economy
Inflationary pressure in India has been variously attributed to
(a) the rise in global prices of crude oil, food grains and metals,
(b) domestic supply constraints in the food economy other than food grains, and
(c) overheating caused by the fiscal expansion initiated in response to the global crisis
The stickiness in inflation, despite the significant growth slowdown, was largely on account of high primary food inflation, which was in double-digits during the first quarter of this year driven by a spike in vegetable prices and sustained high inflation in protein items.
Food inflation has suffered due to uneven and deficient monsoon.
India is the second most important FDI destination after China for transnational corporations during 2010-12. The sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware.
FDI in 2010-11 decreased by 26.7% from 2009-10 and again increased by 32% in 2011-12.
Increase in FDI inflow led to huge employment opportunities, increased investment in technology, huge tax revenue generation.
Rise in exports is due to the increase in the FDI inflow. Exports account to 22% of India’s GDP. India’s main export partners are US, European Union, UAE and China.
India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Other imported products are: machinery, gems, fertilizers and chemicals. Main import partners are European Union, Saudi Arabia and United States.
Depreciating Rupee:
One of the primary reasons for depreciation of rupee is a major portion of Foreign exchanges, goes for importing crude petroleum. Another item impacting it is the gold imports, needed to satisfy...

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