Short-Term Forecasts for Key Sectors that Influence India\'s GDP, based on Laspeyres, Paasche, and Fisher\'s Ideal Index

Abstract

The study examines the role of index numbers in analyzing India’s economic performance across key sectors agriculture, industry, services, exports, and foreign investments between 2020 and 2024. Using Laspeyres, Paasche, and Fisher’s Ideal Index methods, the paper quantifies price and quantity changes to understand sectoral contributions to GDP growth. Findings show that services dominate India’s GDP (53%), followed by industry (29%) and agriculture (18%). The study highlights inflationary pressures, sectoral drivers, and state-level contributions, offering an analytical framework for policymakers and economists to interpret macroeconomic trends.

Introduction

This study emphasizes the importance of index numbers—Laspeyres, Paasche, and Fisher indices—in analyzing India’s economic growth, inflation, and sectoral performance across agriculture, industry, services, exports, and foreign direct investment (FDI) from 2020 to 2024. These indices help distinguish between nominal and real growth by measuring price and quantity changes over time, aiding policymakers and economists in understanding the drivers of GDP growth and inflation.

India’s rapid economic transformation, marked by a surge in services, industrial diversification, and stable agricultural output, is analyzed using these indices. Data from various sources (RBI, MOSPI, IMF, etc.) were converted to USD for consistency. The study applies these index numbers to sectoral data to evaluate inflation-adjusted contributions to GDP and to identify positive and negative macroeconomic influences.

Key findings highlight that moderate price increases (about 13%) were observed in services such as IT and healthcare, driven by wage inflation and fuel costs. Significant quantity growth in IT services (+54% hours) and banking (+42% accounts) largely propelled GDP expansion. The Fisher Ideal index, considered the most accurate, effectively captures these price-quantity dynamics. The study also includes a state-wise GDP contribution analysis for 2024–25.

Overall, the research underscores index numbers as essential tools for understanding India’s evolving economic landscape, providing valuable insights to policymakers, investors, and academicians to support balanced and inclusive growth strategies.

Conclusion

1) Services sector dominates GDP (53%), with IT and banking as key drivers. 2) Industry contributes 29%, supported by manufacturing (autos, steel, pharma, electronics). 3) Agriculture contributes ~18%, showing slower but steady growth. 4) Inflation (13–23%) varied across sectors, driven by global commodity prices, supply shocks, and INR depreciation. 5) State-wise analysis shows Maharashtra, Tamil Nadu, Karnataka, and Gujarat as top GDP contributors (?40% combined). 6) Positive correlations: GDP growth, GVA, IIP, PFCE, GFCF, exports, FDI, stock market expansion. 7) Negative correlations: unemployment, inflation, crude oil prices, fiscal deficit, currency depreciation, IT layoffs.

References

[1] NASSCOM. (2024). IT and Digital Services Reports. [2] RBI. Annual Reports & Bulletins. https://rbi.org.in [3] MOSPI. Ministry of Statistics and Programme Implementation. https://mospi.gov.in [4] FAO. FAOSTAT Database. http://www.fao.org/faostat [5] USDA. India Reports. https://www.fas.usda.gov [6] SIAM. Society of Indian Automobile Manufacturers. https://www.siam.in [7] Ministry of Electronics & IT. https://meity.gov.in [8] APEDA. Agricultural and Processed Food Export Development Authority. https://apeda.gov.in [9] Directorate General of Foreign Trade (DGFT). https://dgft.gov.in [10] DPIIT. Department for Promotion of Industry and Internal Trade. https://dpiit.gov.in [11] IMF & World Bank. Economic Outlooks and Reports. [12] CMIE. Employment Data. [13] Economic Survey of India (2024). Ministry of Finance. [14] NASSCOM: (IT exports/hours). https://www.nasscom.in [15] National Health Authority (NHA): (healthcare visits). https://pmjay.gov.in [16] RBI Annual Reports: Banking penetration stats. [17] Ministry of Statistics (MOSPI): Transport CPI/WPI. [18] NITI Aayog Health Index: https://www.niti.gov.in [19] State Economic Surveys (e.g., https://www.karnataka.gov.in) [20] FAO STAT: (global agri-prices). http://www.fao.org/faostat [21] APEDA: (India’s export/import data). https://apeda.gov.in [22] MOSPI/RBI: For CPI and exchange rates. [23] USDA India Reports: Production forecasts. [24] Ministry of Agriculture: https://agricoop.gov.in [25] Indian Sugar Mills Association (ISMA): https://www.indiansugar.com [26] Society of Indian Automobile Manufacturers (SIAM): https://www.siam.in [27] Joint Plant Committee (Steel): https://www.jpcindiansteel.in [28] Indian Pharmaceutical Alliance: https://www.ipa-india.org [29] Ministry of Electronics & IT: https://www.meity.gov.in [30] Annual Survey of Industries (ASI): https://mospi.gov.in [31] Directorate General of Foreign Trade (DGFT): https://dgft.gov.in [32] RBI Export Data: https://www.rbi.org.in [33] NASSCOM: https://www.nasscom.in [34] Petroleum Planning & Analysis Cell (PPAC): https://www.ppac.gov.in [35] DPIIT FDI Statistics: https://dpiit.gov.in [36] RBI Bulletin: https://www.rbi.org.in [37] NASSCOM GCC Report 2024 [38] Ministry of Statistics (MOSPI): https://www.mospi.gov.in [39] Reserve Bank of India (RBI): https://www.rbi.org.in [40] NASSCOM: https://www.nasscom.in [41] USDA India Reports: https://www.fas.usda.gov [42] MNRE Annual Report: https://mnre.gov.in [43] RBI: https://www.rbi.org.in

Copyright

Copyright © 2025 Riyadh Senan, K. Y. Ingale. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.