ABSTRACT
The global credit crisis of 2008–9 and its aftershocks have created conditions whereby the Twelfth Plan will be launched in a less benign and a more uncertain macro-economic environment than its predecessor. While there is no doubt that India weathered the global crisis much better than most other countries in the world (see Table 7.1 for a comparative picture of the post-crisis growth performance in selected countries), it certainly has not been immune. The growth prospects for 2011–12 (FY11–12) have weakened significantly, with the provisional CSO estimates indicating an annual 6.9 per cent GDP growth rate; the halcyon days of 8 per cent-plus GDP growth attained in the Eleventh Plan 2 period seem a distant dream, at least for now. Both consumption and investment have seen a sharp deceleration on an annual basis (quick estimates indicate that industrial production growth slumped to 1.8 per cent in December 2011 from 5.9 per cent in the previous month, primarily due to a collapse in the capital-goods segment, which indicates investment demand in the pipeline: this segment posted a decline of 16.5 per cent), although comparing full-year trends with current quarterly data indicates that the deceleration may have troughed. Also, while according to global rating agency Standard & Poor’s (S&P), India’s per-capita GDP remains among the lowest of all investment-grade sovereigns, recent data does indicate a healthy rise in the consuming middle and rich income groups (see Table 7.2). Growth rates of Brazil, India, China and South Korea https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">
Brazil
India#
China
South Korea
2008
5.1
9.0
13.0
2.2
2009
−0.2
6.7
8.7
0.2
2010
7.5
7.4
10.3
6.1
2011 (est.)
3.0
7.5
9.0
3.5
Source: Author’s compilation from country sources.Note: For India, 2009, 2010 and 2011 implies FY2008–9, 2009–10 and 2010–11 respectively
High growth in consumer groups in India https://www.niso.org/standards/z39-96/ns/oasis-exchange/table">How Steep the Income Pyrami!
Consumer Class (Annual household income at FY02 prices
Distyribution of households (Mn)
Distyribution of households (%)
Share of rural (%)
Annual growth (%)
FY02
FY10
FY02
FY10
FY02
FY10
DEPRIVED (Below ₹90.00 (Below $2,000)
135.4 (731)
114.4 (618)
71.9
51.5
81.8
84.2
-2.1
ASPIRERS ₹90.000-200.000 ($2.000-4.000)
41.3 (221)
75.3 (405)
21.9
33.9
48.5
61.2
7.8
MIDOLE CLASS ₹200.000-1.000.000 ($4.000-21.000)
107 (58)
28.4 (153)
5.7
12.8
35.2
33.4
12.9
RICH Over ₹1.000.0000 (Over $21.000)
08 (4)
3.8 (20)
0.4
1.7
22.9
22.2
21.4
TOTAL
188.2 (1014)
221.9 (1195)
100
100
71.6
68.8
2.1
