GROWTH DRIVERS OF RETAIL SECTOR IN INDIA

<p>Liberalisation of the Indian economy in 1991 brought about a radical shift in economic policies and possibilities. It was also marked with unprecedented economic growth. There was a significant jump in the GDP growth rate and a spurt in national income. Traditionally, the principal measure of a growing economy is its rising Gross Domestic Product. India today is growing and is considered to be one of the largest economies of the world. Over the past decade the Gross Domestic Product (GDP) has grown at an average annual rate of seven percent. The gross domestic product (GDP) jumped to nine percent in 2005-06, up from 5.56% in 1990-91 and to 8.5% in 2010- 11from 8% in 2009. In the year 2010, GDP in India was worth US dollar 1729.01billion; according to a report published by the World Bank. According to a quarterly report published by Technopak (volume 3, 2010); the annual household income is now almost US$ 4,000, and if it is calculated on the basis of purchasing power parity, then it is over US$ 12,000 per year. Further it is quite likely to double in the next ten years. As India's economy has grown so has the spending power of its citizens. This in turn has led to the growth in the retail sector. The Indian retail market currently stands at USD 396 billion and is likely to grow further at 12% to increase to USD 574 billion by 2015 (Source: Deloitte Retail POV “Indian Retail Report - Changing with the changing times”; IBEF report). This sector is the second largest employer after agriculture, employing more than 35 million people with wholesale trade generating an additional employment to 5.50 million more. The growing disposable income in the country is resulting in increasing consumer spending habits.