PRAEDICO GLOBAL RESEARCH PVT.

LTD
Name :- DHVANI CHAUHAN
Task 2:- INDIAN ECONOMY ON 5 DIFFERENT ECONOMIC
FACTORS
 5 Economic Factors are :
1. Inflation
2. Gross Domestic product (GDP)
3. Consumer Price Index (CPI) & Wholesale Price Index
(WPI)
4. Per Capita Income
5. Forex Reserves

1. Inflation:-
Inflation is crucial to determine one’s purchasing power. In other words,
inflation is a measure that causes the prices of both goods and services to
rise over time and buyers will feel the pinch as it affects their personal
finance, particularly spending and buying habits.
The country’s retail inflation, which is measured by the consumer price
index (CPI), slipped 16-month low to 5.66% in Mar. 2023. Inflation data on
the wholesale Price Index (WPI), which calculates the overall prices of
goods before selling at retail prices, eased 1.34% during the period.CPI hit
the highest of 7.79% in Apr. 2022, and WPI reached 15.88% in May 2022.
Compared to inflation in Mar. 2020, CPI is down 0.18%, and WPI is up
0.34%.The impact of inflation is felt across different sectors of the economy
which are favourable to some and unfavourable to others.

2. Gross Domestic Product:-

GDP or “Gross Domestic Product” refers to the monetary value of all goods
 and services produced in a nation during a given year. A higher GDP
indicates that the country is financially strong and growing at a stable rate.
According to the World GDP Ranking 2023 list, India is the fifth largest
economy in the world. Other prominent countries like the United States of
America, China, Japan, Germany, etc., have a significant presence in this
GDP Ranking list. The Asian Development Bank (ADB) projects growth in
India’s gross domestic product (GDP) to moderate to 6.4% in fiscal year (FY)
2023 ending on 31 March 2024 and rise to 6.7% in FY2024, driven by
private consumption and private investment on the back of government
policies to improve transport infrastructure, logistics, and the business
ecosystem.
3. Consumer Price Index (CPI) & Wholesale Price Index
(WPI):-
Consumer Price Index or CPI is the measure of changes in the price level
of a basket of consumer goods and services bought by households. CPI is a
numerical estimation calculated using the rates of a sample of representative
objects the prices of which are gathered periodically. The country’s retail
inflation, which is measured by the consumer price index (CPI), accelerated to
6.50% in Jan. 2023. The Wholesale Price Index (WPI) reports the change in the
price of goods sold by wholesalers across India. The higher this number is the
stronger the affect on consumer inflation. A reading that is stronger than forecast
is generally supportive (bullish) for the INR, while a weaker than forecast reading
is generally negative (bearish) for the INR. The annual rate of inflation based on all
India Wholesale Price Index (WPI) number is 4.73% (Provisional) for the month of
January, 2023 (over January, 2022) against 4.95% recorded in December, 2022.

4. Per Capita Income:-

Per capita income is the measurement of money earned per
person in a certain zone. In layman terms, we can say that “Per Capita
income is the Income supposedly earned by a single person in a country.” It
is calculated by dividing country’s national income by its population. It
should not be misunderstood by average income (because it includes non-
employed and kids population), rather it serves as a pointer to a country’s
living standards. It can be applied to the average per-person income of a
 village, city, state or country. It can be used as a means of gauging the living
circumstances and quality of life of citizens. The current per capita income
represents a rise of 15.8 per cent over the previous year. It was estimated
at Rs.1,27,065 and Rs.1,48,524 for 2020-21 and 2021-22, respectively

5. Forex Reserves:-
As of September 2021, the foreign exchange reserves of the
Indian economy stood at around USD 639.46 billion. These reserves are
held by the Reserve Bank of India (RBI) and comprise foreign currencies,
gold, Special Drawing Rights (SDRs) with the International Monetary Fund
(IMF), and the RBI's position with the IMF.Foreign exchange reserves are an
important indicator of a country's economic strength and ability to meet its
international obligations. India's foreign exchange reserves have been
steadily increasing over the years, thanks to various measures taken by the
RBI and the government to attract foreign investment and maintain a stable
exchange rate.The RBI uses these reserves to intervene in the foreign
exchange market to maintain the value of the Indian rupee against other
major currencies. These reserves also provide a cushion against external
shocks and can be used to finance imports or pay off foreign debt in times
of crisis.