How does various industry influence GDP overall:

5. Construction Sector:

 Construction industries main functions involve constructing buildings, infrastructure, industrial

facilities, and related operations from conception to completion. Construction normally begins
with planning, finance, and design and continues until the asset is finished and ready for use.
 It also includes repairs and maintenance, any expansion, extension, or improvement work, and
the asset's final deconstruction, dismantling, or decommissioning.
 Construction Industry contributes about 8% of the GDP, which includes employment,
procurement of materials and transportation of the purchase.
 Construction industry paves way for increased employment as it is a labour intense work, also
increases the potential to heavy investment in various projects both in rural and urban areas,
and technological advancements in the recent past.
 Bank Loans that are issued for these projects help bank in generating funds for the business
through interest rates. There is a growth in construction sector from 2016 to 2020 and there is a
downfall from 2020 – 2022 which could be due to pandemic where people were not ready for
new investments on buildings.

Constructi on
1,200,000 1,038,680
916,445 964,306 1,026,789 962,835
1,000,000
800,000 735,525
600,000
AMOUNT

400,000
200,000
-
2016- 2017- 2018- 2019- 2020- 2021-
2017 2018 2019 2020 2021 2022

YEAR

6. Trades, Hotels, Transport, communication and services related to broadcasting:

 Hotel Industry is employee intense sector for preparing food & beverages and managing the
hotel like cleaning, Travel & Tourism, recreation.
 Transport industry refers to both commercial and passenger transporting from one place to
another which is major chunk due to it manages the transportation of goods across the cities
and states
 According to data issued by the National Statistical Office, trade, hotel, transportation,
communication, and broadcasting services had a significantly narrower deceleration in the July-
September quarter (NSO). The economy's Covid 19-induced lockup was eased in Q2, resulting in
a 15.6 percent decrease in this sector.
 Trade, hotels, transportation, communication, and services related to broadcasting contributes
about 19% of GDP which is a significant amount which had a 47 percent decrease in the April-
June quarter of 2020-2021.
 In Trade, Hotels, Transport and communication sector we could note a gradual increase from
2016 to 2020 and from 2020 to 2022 we could note steep down fall which is due to most of the
hotels and tourism was affected by the pandemic.

Trade, Hotels, Transport, Com-

munication
3,000,000 2,538,757 2,689,726
2,500,000 2,146,379 2,368,419 2,147,679
2,000,000 1,641,693
1,500,000
AMOUNT

1,000,000
500,000
-
2016- 2017- 2018- 2019- 2020- 2021-
2017 2018 2019 2020 2021 2022

YEAR

7. Financial, Real Estate and Professional Services:

 Financial and real estate contributes to 22% of the GDP, which is a significant portion of the
overall economic rate. When there is a impact on the sector it affects the whole economy and
the banking sector who work based on the banking services.
 Any service which is done are executed with the help of monetary benefits and the monetary
policy is set by RBI which leads to
 The banking, real estate, and professional services sectors in India are expected to grow in fiscal
year 2022 compared to the previous year. In fiscal year 2020, these sectors were part of the
country's service industries, which accounted for the majority of the country's gross value
added.
 Financial service includes banking, investing and insurance activities. These activities improve the
financial transactions in an economy which helps in boosting the GDP.
 Real Estate booms only when public has excess funds over than expense, in that case there
would be a decrease in bank deposits and increase in investment in the economy which shows
the negative relation between the banking and the economy.
 We could note the financial and real estate sector has been growing since 2016 in a constant
rate and would be increasing in 2021 – 22 as well. We have only 3 Quarters data for the current
year which is why we could note a decrease in the graph.

Financial, Real Estate and Pro-

fessional Services
3,500,000
2,897,393 2,961,910
3,000,000 2,714,222
2,492,967 2,537,190
2,500,000 2,379,167

2,000,000
AMOUNT

1,500,000
1,000,000
500,000
-
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
YEAR

8. Public Administration, Defence and other services:

 The defence sector is contributing to the expense which is part of GDP as the budget
for defence is based on the revenue generated and the GDP of the economy. The
cost of defence spending is reflected in the national debt and a shift of potential jobs
from the private to the public sector.
 Both Public Administration and defence has employee cost which is a part of the
GDP and that also offers job opportunities and increase the per capita income of the
population.
 Public administration and defence sector contributes to 13% of the overall GDP of
India. In which approximately 5% is contributed towards the defence and balance is
public admin.
 This sector grows from 2016 to 2020 like other sectors and falls from 2020 to 2022
which is due to pandemic when there was high expenditure on public admin and
due to the war we could note further higher expense in 2021-22 which leads to
decrease in the contribution to GDP.
 Public Administrati on, Defence and
Other Services
2,000,000
1,727,639 1,633,081
1,625,477
1,600,000 1,512,542
1,395,982 1,346,016
1,200,000
AMOUNT

800,000

400,000

-
2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
YEARS

Correlation Analysis:

Correlation analysis is a statistical approach for calculating the link between two variables
and measuring the strength of the linear relationship between them. Simply defined, correlation
analysis determines how much one variable changes as a result of the change in the other. A high
correlation indicates a strong association between the two variables, whereas a low correlation
indicates a poor relationship between the variables.

The correlation coefficient is a unit of measurement used to calculate the intensity of a

linear relationship between the variables in a correlation analysis. It is clearly identifiable since it is
represented with the symbol r and is usually a value without units that falls between 1 and -1. There
are 3 types of correlation which are

Positive Correlation

A positive correlation between two variables indicates that both variables move in the same
direction. Increases in one variable result in increases in the other, and vice versa.

Negative Correlation:

When two variables move in opposite directions, they are said to have a negative
correlation. Increases in one variable result in decreases in the other, and vice versa.

Weak Correlation:

Weak/zero correlation are one variable has no effect on the other, there is no correlation.

Correlation Analysis of various factors that contribute to GDP:

  We could note the correlation between the same sector would result in 1 which we
could note from the diagonal section of the table above
 We could note the highest correlation is between the public administration, defence
and electricity, gas which has a correlation factor of 0.98. Hence, we could say their
relationship is strong, when there is increase in the expense towards the public and
defence it would result in the increase of prices in public commodities like electricity,
gas and water. Only when government increases their revenue, they could increase the
spendings also.
 We could note the lowest correlation is between Financial, Real Estate and Minning
& Quarrying, which results in correlation of 0.26. The relationship between them is
very weak which is when there is change in financial policies there will be no much
effect on mining activities or vice versa.
 Other high positive correlating factors are between
1. Construction and Trade, Hotels, Transport, communication = 0.98
2. Agriculture, Forestry and Financial, Real estate, professional services = 0.92
3. Public Adminstration, defence and Agriculture = 0.91
 Other low correlating factors are between
1. Public Admin, defence and Mining, Quarrying =0.37
2. Electricity, gas, water supply and Mining, Quarrying = 0.44

Correlation Between GDP and Public sector Bank Loan: