Forty years ago, the total market capitalisation of listed companies in the Indian stock market stood at a paltry seven per cent of gross domestic product (GDP). In 2012, the figure stood at 68 per cent.The trajectory of the Indian stock market can broadly be divided into three distinct periods - the pre-reform era of lacklustre growth, the decade following the reforms of the early 90s, and the post-2003 era of rapid growth.After growing for decades at what was called the "Hindu rate of growth", the reforms of the early 90s sowed the seeds of India's transition to a phase of higher growth. Mirroring the rise in GDP growth was a sharp rise in the stock market, with total market capitalisation through the decade averaging 30 per cent of GDP.Since 2003, India emerged as one of the fastest growing economies, with GDP growth averaging eight per cent. The period also saw the stock market touching all-time highs, with market capitalisation rising to 147 per cent of GDP in 2007.However, the fi

40 Years ago...and now: Rise in m-cap mirrors GDP growth

Business Standard

Through the past few decades, India has been transformed from a largely agriculturally-oriented economy to one in which the services sector accounts for an overwhelming share of gross domestic product (GDP). While the share of agriculture and allied activities in GDP has declined from 40 per cent in 1973-74 to less than 14 per cent in 2013-14, that of the services sector has risen to about 60 per cent through the same period.However, despite this paradigmatic shift, there hasn't been a commensurate change in the structure of the workforce. Unlike in other developing economies, where such transitions were accompanied by labour movements from agriculture towards manufacturing, the Indian agriculture segment continues to employ about half the total labour force. The limited labour movement has largely been towards the construction sector.An equally troubling aspect has been the rise in casual employment through the decades. Data indicate in rural areas, casual employment for males rose fr

40 Years Ago...and now: GDP pie sees transformation

Forty years ago, India was in the throes of the infamous licence raj. The economy was dominated by the public sector, with private enterprise almost relegated to the margins. But the reforms implemented in the early 90s, carried out against the backdrop of a balance of payments crisis transformed the scenario, with the state ceding space for greater private sector engagement.In the years prior to the reforms, from 1973-74 to 1990-91, annual  growth averaged 4.7 per cent. However, in the post-reform period, from 1992-93 to 2013-14, there was an acceleration, with growth averaging 6.8 per cent. According to the latest International Comparison Program (ICP) estimates, India is now the third-largest economy, accounting for 6.4 per cent of world GDP. This acceleration in growth translates to a fourfold rise in the per capita net national product which, measured at 2004-05 prices, rose from ~9,792 in 1973-74 to ~39,904 in 2013-14. It is this acceleration in growth that has resulted in a shar

40 Years Ago...and now: Much water has flowed...

Know about India's Biggest BS BFSI Event 2024 at Business Standard

Buzzing :

Page 32 - BS Events

40 Years ago...and now: Rise in m-cap mirrors GDP growth

40 Years Ago...and now: GDP pie sees transformation

40 Years Ago...and now: Much water has flowed...