Several structural factors are likely to contribute to economic growth in the long run. These include favorable
demographics, reducing dependency ratio, rapidly rising education levels, steady urbanization, growing young
and working population, IT revolution, increasing penetration of mobile and internet infrastructure, increasing
aspirations and affordability etc.

India's Nominal GDP in Fiscal (US$ billion)

 
     

1 Ld
India's Rank in World GDP

Recon 9.9% 10.8% 14.4% 11.1% 11.2% 6.9% 10.3% 10% 10%
Growth Projections

Post COVID-19 “3.0% © 13.5% 10.7%
Growth Projections

y 573

“|
80 << 492 ae

7

 

 

1991 1995 2000 2005 2019 2015 2018 2019 2020 2021P 2022P 2025P

@ Nominal GDP Loss in Nominal GDP due to COVID-19

1 USS= 75
White boxes at the top refer to India’s GDP rank on a global basis
*2012- GDP Spike in Real growth rate due to change of base from 2004-05 to 2011-12. Hence excluded from decadal growth rate as well

Domestic Consumption
High share of domestic consumption in Private Final Consumption Expenditure (PFCE)

India's share of domestic consumption, measured as private final consumption expenditure, in its GDP was
approximately 60.5% in Fiscal 2020. This private consumption expenditure includes final consumption
expenditures of households and non-profit institutions serving households, and comprises both goods (food,
lifestyle, home, pharmacy etc.) and services (food services, education, healthcare etc.). High share of private
consumption to GDP has the advantage of insulating India from volatility in the global economy. It also implies:
that sustainable economic growth directly translates into sustained consumer demand for goods and services.
India's domestic consumption has grown at a CAGR of 11.1% between Fiscal 2014 and Fiscal 2019, compared to
4.3% and 8.2% in the United States and China, respectively.

India's Private Final Consumption Expenditure (In US$ billion)

Pre
covio.9

9% 9% Growth
CAGR: 12.8% (1991-2020) YD Projections

Post
covio-19
Growth
Projections

 

 

1991 2005 «2010S «20132016 = 2017S: 201E «= 2019» 2020.» 2021P = «2025P
MPECE Loss in PFCE due to COVID-19

Source: Technopak Analysis, RBI Data; Year indicates Financial Year

116
