Gross Domestic Product
The Economy of India is being labeled as the 7th largest economy in the world, when measured in terms of nominal GDP. When we talk about the PPP (Purchasing Power Parity), the country ranks as high as third in the world and the fast paced rise of the country all over the world can be justified by the country’s involvement as one of the member in G-20, a member of BRICS, and developing at a growth rate of around 7% per year.
There are several contributing factors in the development of the country. The huge manpower along with health savings etc are the highlights of the fast paced growth of the country.
India, since the beginning has been following the three sectors as a broad category when it comes to the measurement and tracking of the economy of the country; these three sectors in the form of Agriculture, Industry and services sector, which covers various aspects when classified internally.
Share of Financial Services
The services sector has the largest share in the Gross Domestic Product. The share of the services sector has been on the rise since 1950, and can be attributed to the wide scale of the employment which the services sector has been providing to the entire country. The financial services, which comes under the category of services sector is an organized sector, comprises public, private and several foreign owned commercial banks and several cooperative sector banks. Some of the institutions like private lending agencies and non banking financial companies form a part of the unorganized sector. These unorganized sector of the financial services form a very inseparable part of the sector, as many people prefer these institutions for their small to medium needs and are even easily accessible.
Indian financial services can be judged through different ways and upon finding out the truth, it can be said that Indian financial services is one of the largest in the world. Also, a data suggests that the Indian life insurance sector is the biggest in the world with the number of policies as high as 360 million. However when we talk about the premium volume, India stands as the 15th largest insurance market in the entire world. As per reports, Indian financial sector contributes around 61% of the Indian GDP and has been growing at a pace of around 10% each year.
Recent Developments in the Financial Sector
The recent development in the financial sector attributes to even more robust sector, thus contributing more towards the Gross Domestic Product of the country. Some of the reforms in the financial sector are:
Opening up of the most awaited ‘Payment Bank’ sector
Allowing banks to raise funds via long-term bonds for financing the critical infrastructure sector
Raising the cap of FDI in insurance sector by 49%
Starting Mudra Scheme
The announcement of the plans to increase the number of common service center in order to promote better interaction of the rural entrepreneurs and national level entrepreneurs and serving as a single point connection place for both, where thoughts can be exchanged between the both.
The announcement of GST from 1st April, will later on, provides a new boost to the Indian economy and will help the people to combat the increasing pressure.
The rebate in the transactions made with the use of the electronic medium like Credit cards, Debit cards, Net Banking, Mobile Wallets and various other means will help the people to save their money and will motivate them to use the electronic means in order to get benefits. In a way, it helps the use of cash and will generate enough profit to the government.
The allowing of the third party white labeled ATMs with the services of the International cards, including all sorts of International prepaid cards for better cash supply is a good way to the strengthening of the financial services of the country, thus contributing to the Indian GDP in a way.
Over the time, the Indian banking sector is well poised to become the 5th largest in the world, owing to the great contributions from all supporting factors. The aspects of the financial sector have been on the bright road with the strengthening of the financial sector with each passing time. Here are some research data for you all:
Bank credit is expected to grow at an annual growth rate of 17% in future days.
India’s life insurance sector is and will be world’s largest life insurance sector for a long time to go.
The margin of the Insurance sector is expected to touch US$ 350-400 billion by 2020
While, other sectors like pension funds, mutual sector, non-banking financial etc also show the same promise ahead.
As per data and analysis, the Indian economy will be growing at a fast pace in more upcoming days and the projected growth of 7.6% as projected in the Economic survey of 2016-17 is very much achievable.
The Indian GDP is growing at a good pace and all fields of the services sector are have the huge contribution of the services sector towards the Indian GDP. As of now, Indian GDP relies heavily on services sector (financial sector is a very big part of it), and the services sector is contributing in a very dependable way, it should be and will contribute towards it, in more upcoming decades.
The Gross Domestic Product of the country was worth 2073.54 billion US dollars in 2015 and it is increasing with each passing year, with the year 2016 seeing an upwards movement of 7.2% in the figures. Thus, looking forward the Indian GDP will continue to progress with the same pace.