Plot Indias GDP at market prices and factor cost at current prices for the period 1950-51 to 2008-09. Comment on it. After the implementation of liberalization policies in 1990-91 we can see a steady growth in the GDP @ Market cost & GDP @ Factor cost (Current Prices).

Comment on the overall growth story of India during each of the sub- phases in detail. Rationalize the volatility of these growth rates.

Sub-Phase 1(1970-1971 to 1984-1985): This period saw a GDP growth rate of 65.034% with a CAGR of 65.034. The Agriculture sector saw a growth rate of 35.37% while manufacturing sector saw a growth rate of 90.28% and the Services sector saw a growth rate of 85.37%. During this phase the economy was pre-dominantly a closed one. There was significant nationalization of banks. Also there was a period of negative growth rate of -5.21% in 1979-1980, owing to the global oil-crisis. The average growth rate of GDP was 3.71%. Some initiatives were taken by the Government towards Industrialization and the result can be seen in a good growth rate of the manufacturing sector. There was marked volatility in the GDP growth rate owing to events like Oil-Crisis and the war of Pakistan in 1971. This led to periods of negative growth between 1972-1973 and 1979-1980.

Sub-Phase 2(1985-1986 to 1994-1995): This period saw a GDP growth rate of 59.75%, a bit lower than the last period. There was huge deficit and Government had to borrow lots of funds. This reduced the Government spending in the manufacturing sector which fell to 66.89%. Agriculture sector grew at the same rate as the previous period ie. 34.96%. Whereas, there was a decline in the service sector growth rate to 72.86%. The economy was going through a rough phase. The average Growth rate was 5.366%. The effects of liberalization began to show, although not fully, with a somewhat better growth rate in the average GDP.

Sub-Phase 3(1995-1996 to 2008-2009): This happens to be the best phase of the three. The effects of Liberalization were clearly visible during this phase and Services sector grew at a tremendous rate of 200.02%. The cumulative GDP growth rate was 139.04%. The Manufacturing sector also grew at a brisk rate of 115.37% due to the increase in competition and entry of many private players due to liberalization. Agriculture sector, however, lagged behind at 48.23%. The average GDP growth rate during this period was, 6.95%. There was very less volatility during this phase as the economy was growing at a steady rate. Between 2005 and 2008 the economy grew at a brisk rate of over 9%.