A Quantitative Analysis of Macroeconomic Indicators and GDP Growth in India

Abstract

India is significantly influenced by macroeconomic and sectoral factors, particularly agriculture. The study examines the impact of per capita income, agricultural exports, inflation, exchange rate and agricultural GDP share on India’s Gross Domestic Product (GDP) from 1990 to 2024. Secondary data is used for the present study. The dependent variable in the study is GDP component from sources such as India stat database, the World Bank and FAO, a multiple linear regression model was employed to quantify these relationships. The study addresses the problem of agriculture’s declining share in GDP despite its critical role in employment and rural livelihoods. While increasing per capita income and agricultural exports are expected to drive economic expansion, macroeconomic challenges like inflation and currency fluctuations may hinder growth. The regression results show a strong model fit indicating that 96 per cent of GDP variations are explained by the selected variables. Per capita income and agricultural GDP emerged as the strongest contributors to economic growth, while inflation negatively impacted GDP. The exchange rate significantly influenced GDP, reinforcing the importance of stable foreign exchange policies. However, agricultural exports had a weaker influence, highlighting the need for improved trade integration. The findings suggest that stabilizing inflation, enhancing agricultural productivity, and improving export competitiveness are crucial for sustaining long-term economic growth. The study provides empirical evidence supporting the need for targeted agricultural and macroeconomic policies, emphasizing the importance of investments in agri-tech, infrastructure, and global market access to ensure India’s continued economic resilience.