Question 1 · 10 marks · 179 words written
Opening
The Economic growth is driven by various pillars among which domestic consumption is primary source In India considering greater than 50% of GDP (by expenditure method)
Body · points
Domestic Demand as Important Driver of India's economic growth
i) High contribution to GDP (>50%) ii) Young & large population hence demand act as important source/driver. iii) Private consumption drive growth of many sectors like - FMCG, automobile, electronics etc iv) Robust demand give a positive signal to investors & enhances private investment & capital formation
However, other factors also influence growth trajectory like
i) Government expenditure → Capital Investment by government eg - In last 3-4 years it has increased to now 3.4% of GDP → driving growth ii) Private Investment → Capital formation iii) Export growth → also a major driver iv) Also, the consumption behaviour of individuals shapes demand eg recent HCES survey highlighting change in consumption pattern → high expenditure on non-food items
Nevertheless, private consumption remains biggest source/puller of economic growth hence it needed to enhanced → Raising income level → Addressing rural distress and Agricultural sector issues
Close · a way forward
None written.