INTRODUCTION:-

Talking about any nation’s economy and growth we shall have a clear idea about its
determinants and tools of calculation. GDP (Gross Domestic Product) is the most appropriate
measure to calculate India’s GDP. It calculates income of everyone in the economy. GDP
measures two things:-

1) Total income of everyone in the economy

2) Total expenditure on the economy’s output of goods and services.

Things to be considered while calculating GDP:-

 It counts on all items produced and sold in the markets

 It includes only the value of final goods
 It includes both:- tangible goods and intangible services
 It includes goods and services in current market scenario and does not include any past
goods and services
 It measures value of production within geographic limitations of the country

Hence we can conclude that GDP measures takes place the measures of production in a
confined geographic condition in a given period of time.
The Gross Domestic Product (GDP) of India has been accelerating and has reported annual rate
of 8.49% in last quarter i.e 2004-05 to 2009-10. Contributors to high GDP of India are mainly
comprised of service sectors and state like Gujarat and Maharashtra.

But, Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh are some of the poor states of India
and have been termed as “BIMARU” (acronym) states. Not only BIMARU states but other four
states like Jharkhand, Chhattisgarh, West Bengal and Orrisa are also termed as bottom states of
India. There was no development in these states where as India’s as a whole growth rate was
phenomenally increasing. Their performance was abjectly affecting India.

NO MORE BOTTOM STATES:-

We have been observing phenomenal growth in India’s GDP from past 5 years. During these
years 5 out of 8 bottom states of India has observed significant growth and brought them self up
to miracle economies. The biggest contributor here is BIHAR-a state which was having lowest
growth rate prior.
Following are the average growth rates of these bottom states for 2004-05 to 2009-10:-

Bihar 11.03%
Uttrakhand 9.31%
Orrissa 8.74%
Jharkhand 8.45%
Chhattisgarh 7.35%
Uttar Pradesh 6.29%
Madhya Pradesh 4.89%
Rajasthan 6.25%

Miracle economies are defined as “economies with over 7 % growth”. Miracle economies
comprises of BIMARU states + Orrisa, Jharkhand, Chhattisgarh, and West Bengal

It is easily visible from the above table that these bottom states have proved themselves to be
miracle economies. With BIHAR topping the list has reached the average growth rate of 11.03%
annually. Now, it is the second fastest growing state in India, next to Gujarat (11.05%).
For these years BIHAR has been a victim of poor governance, caste based politics moreover,
BIHAR being an agrarian state could not gain momentum in agriculture and many other factors
influencing , rather hampering the growth has retrained Bihar from development for many years.
After creation of friendly business atmosphere by NDA government, the Dairy Industry and
sugar industry has become a high performing sector. 25 new sugar factories were set up in Bihar
between 2006 and 2007. The GSDP of Bihar is consistently increasing i.e from 10.20% in 2005
to 18.28 % in 2007.

Similarly, Rajasthan is also on its way to advancement it topped the investment charts during
2009. Orissa is rich in mineral resources. Every single state is different in terms of level of
development. They can be classified on the basis of per capita income between developed and
underdeveloped States. The growth rate of Rajasthan’s SDP has been about 12 per cent per
annum between 2002-03 and 2006-07. Whereas for Orissa, Madhya Pradesh and Uttar Pradesh
the growth rate were 11, 10 and 6.5 per cent respectively. The per capita income of Orissa,
Rajasthan, Madhya Pradesh, Assam, Uttar Pradesh, and Jharkhand is lower by 25 to 40 per cent
as compared to the national average.

GROWTH SHALL BE ALL INCLUSIVE:-

For overall growth of India it is necessary to develop each and every state. 80% of economy is
because of 20% of people 20% of economy is because of 80% of people. These bottom states use
to come in 20% of people but now as they are developing it will bring about the tremendous
growth. Considering that any state remains backward, it affects the overall development. This is,
Development with respect to education, health and other public utilities.

The investments in underdeveloped states has been decreasing day by day this will lead to
worsening the condition as they are in dire need of development rather than the developed states.
Living standards are also quiet low in backward states. According to the Planning
Commission, the per capita consumption of electricity in backward States is less than half
as compared to developed States. To push the nation up it is necessary to develop all its human
capital and all the states. We will lack behind in all around development if even one more state
lacks behind in development, this shows how important it is to develop all states rather than just
concentrating on development of major economies of the country. For eg:- it is better that every
member of a family should earn in bits rather than just one member earning and everyone
depending on that member. As gradually the backward states are trying to come out of the web
of under development we need to support them by proper investments and contributions like
politic, industries etc.
Unless and until there is no overall contribution there can be no scope of growth as we measure
our growth through GDP and it includes overall income of the nation hence no state can be
isolated. The basic reasons for drastic growth of poor states are - industry, small savings, social
sectors, consumer prices, agriculture and infrastructure.

KEY DEVELOPMENT INDICATORS:-

We can understand the Indian economy scenario with the help of the following key
development indicators:-

 Gross Domestic Product (GDP)

 Rate Of Inflation
 Industrial Growth

GDP of India has reported annual growth rate of 8.49%. The contribution of industrial sector
and agriculture sector was 29.4% and 17.2 % respectively.

Indian economy is included in one of the fastest growing capitalist economy in the world. It has
highest saving and investment rates

Moreover , the industry also has highest annual growth rate.

Global crises has badly affected India’s balance of payments. This also led to decline in exports
and imports.

Encompassing all indicators we learn that India has been progressing over the years. But it needs
to pay attention on developing states and sectors like agriculture, education etc accelerate the
growth.

Inflation

Even after the high inflation rate of 11% in 2009. India could survive well and was not
drastically affected by the inflation hit.

Foreign institutional investors also made investments worth $10 million USD in year 2009-10.

India being and agrarian country has to wake up on this serious call. We can earn much more
higher rate of GDP if proper irrigation facilities and promotion to farming is considered.