correlation between industrial growth of india and delhi

8/8/2019 Correlation Between Industrial Growth of India and Delhi

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CORRELATION

BETWEENINDUSTRIAL

GROWTH OF INDIA

AND DELHISTATISTICS MAJOR ASSIGNMENT

Syndicate-6

Pinki

Athira Kumari

Ritu Yadav

Rouble Guleria

Manu Pandey

Amit Kumar Pal

Rahul Sharma

Rakesh Kumar

Ravi Kumar

Shubhashish Singh


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CONTENTS

INTRODUCTION

OBJECTIVE

METHODOLOGY

DATA

CORRELATION

ANALYSIS

CONCLUSION


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INTRODUCTION

WHAT IS INDUSTRIAL GROWTH

INDUSTRIAL GROWTH TRENDS IN INDIA

INDUSTRIAL GROWTH TRENDS IN DELHI

EFFECTS OF INDUSTRIAL GROWTH ON INDIAN ECONOMY


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OBJECTIVE

The data that we have presented here has been collected from secondary sources and shows the

industrial growth of India from the year 2000 2010 and industrial growth of Delhi from the year2000 2010. In the year 2000- 2001 the general index stood at 162.6 and steadily rose over the tenyear duration. The growth was slow and steady and at the end of ten year that is in the year 2009-

2010, the index stood at an impressive 304.1.

On a micro level the industrial growth of Delhi has been analyzed in the span of ten years that isfrom 2000 to 2010 with development in Delhi growing by leaps and bounds industrial growth took

of with much fanfare.The year 2000 to 2001 showed an index of 173.82. It has only grown from here forth till the year2006-2007 in which the index was at its highest that is 235.90.

It declined from there and went to 205.14 and then 196.00, it showed improvement in the year

2009 to 2010, where it reached 205.68.

TO STUDY HOW INDUSTRIAL GROWTH OF DELHI AFFECT THE

OVERALL INDUSTRIAL GROWTH OF INDIA

DATA COLLECTION METHODOLODY

The data has primarily been collected from Internet. Following are the websites that we have

used for collecting the data.

www.mospi.com

www.delhigov.com

www.goveindia.com


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www.economictimes.com

www.business-statndard.com

What is Industrial growth


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India is a South Asian country that is the seventh largest in area and has the

second largest population in the world. The land covers an area of 3,287,240square km (India geography) and the population stands at 1,202,380,000 people

(India population) . India has great plains, long coastlines and majestic mountains.Thus, the land has abundant resources. India shares its borders with China,

Bangladesh, Pakistan, Nepal, Sri Lanka and Myanmar.

INDUSTRIAL GROWTH OF INDIA

If all the year were playing holidays, to sport would be as tedious as to work, penned the Bard.

Reports say theres still a bit of work left to make the Commonwealth Games village and venues in

Delhi look spic-and-span . But consider the latest growth figures and trends in industry. Now thelatest quick estimates of the index of industrial production (IIP) for July 2010, over the like period

last year, point at buoyant 13.8% growth in output.

Given that last July the IIP grew 7.2% year-on-year (y-o-y ), it implies a reasonably high base for

the latest industrial growth number. However, disaggregated figures suggest that growth remains

patchy, confined to particular segments like machinery, capital goods and motor vehicles . Also,

growth seems particularly lacklustre in such key segments as synthetics and textile products,

chemicals and metals.

The rather spotty trend in industrial growth calls for probing structural reasons, away from the

immediate growth figures. Umpteen studies suggest that it is not so much growth in factor inputs

like capital and labour that determine industrial output as betterment in total factor productivity

(TFP), defined as improvements in the technology and efficiency levels used to combine capital

and labour. Additionally, studies do show that industries making intensive use of IT have been

most successful in revving up TFP.

A sectoral breakup of the IIP figures (with 1993-94 as base year) into mining, manufacturing and

electricity shows that output growth is not quite evenly spreadout. The data reveal that July growth

in manufacturing , which has over 79% weight in the IIP, was particularly strong at 15% (y-o-y ).

Also, given that growth in manufactures last July was a credible 7.4%, the latest figure seems to be

on a reasonably upbeat growth base. The estimates for July also show almost double-digit growth

in mining output and subdued growth in power generation: the monsoon months tend to be set

aside for annual shutdowns in thermal plants. But a closer look at more disaggregated figures in

the IIP reveals lacklustre growth in large segments in manufactures. So, for the head manmadetextiles, which have a weight of 2.2% in the IIP, the July growth is put at a poor 1.2%.

Also, for textile products (including wearing apparel), with a higher weightage than man-made

textiles, theres been negative 0.7% growth for the month. Further, for wood products, furniture and

fixtures, with weight 2.7% in the index, growth is estimated at negative 9.4%. Its a steep fall

indeed. There are other industry segments where growth has been tepid or worse. So, for example

, for basic chemicals and chemical products, with 14% weight in the IIP, the increase is put at no

more than 2.5%. Or that for basic metal and alloy industries, with weight 7.4% in the index, add up


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to 4.6%.

There are other low-performing sectors as well. And industry segments posting bouyant growth

appear to be basically two: machinery and equipment other than transport equipment, with 9.5%

weight in the IIP, growing 49.4% y-o-y in July. And transport equipment and parts, officialese for

vehicular production, with weight just under 4% in the IIP, zooming ahead by 24.9% for the month.

The weight for transport equipment in the IIP is almost certainly an underestimate , as since 1993anecdotal evidence would suggest that the auto industry has grown at a relatively faster pace. But

the point remains that high industrial growth remains confined, largely, to a few segements. It calls

for appropriate policy initiatives and proactive follow-through .

Use-based classification of the IIP shows that growth in capital goods production, weight just about

9.2% in the index but very much investment-oriented , is a massive 63% for July. Considering that

growth in the segment was a lowly 1.7% in previous July, the latest increase is on a very low base

and the combined growth on the head for two years running would be a little more than 30%, which

is more realistic a figure.

The way the index is constructed, the manufacture of, say, a couple of power turbines in a given

month, intead of one unit, would tend to boost the capital goods index by a huge amount. Given

that theres much coagulation of funds and investment in power generation capacity in the offing, it

is safe to preclude that the realtively larger output of turbines, etc is what is propping up the capital

goods segment, and by implication, the IIP.

Going forward, whats needed is more analysis of the segmental growth figures. A recent multi-

year study by the Bureau of Economic Analysis in the US shows that industries making more

intensive use of IT have experienced heightened TFP growth. The bureau study, using figures from

2003 up to 2007, shows that in 19 industry sub-segments , theres a statistically significant

relationship between IT capital stock and TFP growth.

Could it be that with more usage of IT in such segments as wood and leather products, textiles,

and basic metals and chemicals, would also shore up TFP and boost overall (industrial) growth

here? The offtake of credit also needs monitoring.

Growth remains patchy, confined to a few segments like capital goods, equipment and motor

vehicles The spotty growth trend calls for proactive policy and analysis Could it be that more

intensive use of information technology would boost productivity in the laggard industrial

segments

YEAR GENERAL INDEX

2000-2001 162.6

2001-2002 167.0


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2002-2003 176.6

2003-2004 189.0

2004-2005 204.8

2005-2006 221.52006-2007 247.1

2007-2008 268.0

2008-2009 275.4

2009-2010 304.1


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INDEX

E

S

0

50

100

150

00

50

00

50

IN UST IAL G OWTH OF IN IA


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INDUSRIAL GROWTH OF DELHI

The industrial sector play a vital role in the economic development of the National Capital Territoryof Delhi. As per 1991 census, about 24.63 per cent of the workers in Delhi (7.31 lakh workers)

wereemployed in the manufacturing sector while at the national level the percentage was only 10. TheIndustries Department estimates indicate that in 1996 more than 1.26 lakh industrial units werefunctioning in Delhi which provided employment to more than 11 lakh persons. The estimatedinvestment and production in these units was around Rs. 2,524 crore and Rs. 6,310 crore,respectively.The Economic Census of 1998 indicates that Delhi has 1.29 lakh industrial units employing about14.40 lakh persons. The manufacturing sector in Delhi contributes about 7-8% to the state income.2. A door-to-door industrial survey conducted in Delhi in 1988 found that an average unit employs9workers while 30% of the units employ 4 workers or less. The survey revealed that textilesproducts(garments) units constitute the largest number, followed by electrical machinery and repair services(Table 9.1).

INDUSTRIAL GROWTH3. Delhi has gone through a rapid process of urbanization. The Master Plan for Delhi rules outsettingup large and heavy industries. There is, however, scope to expand small-scale industries. Theavailability of infrastructure, wholesale markets, trade and other commercial services havepromotedthe expansion of small-scale industries in Delhi.OVERALL GROWTH4. There has been tremendous growth in the number of small-scale industries (SSI) in Delhi since1951, and it hasemerged as one of the biggest centres of small-scale industries in the country as indicated below:-STATEMENT 9.1GROWTH OF INDUSTRIAL SECTOR, 1951-96Year Number of Investment Production Employment

Industrial units (Rs. crore) (Rs. crore) (number)1951 8,160 18.13 35.35 95,1371961 17,000 60.00 121.00 1,87,0341971 26,000 190.00 388.00 2,91,5851981 42,000 700.00 1,700.00 5,68,9101991 85,050 1,659.00 4,462.00 7,30,9511996 1,26,218 2,524.00 6,310.00 11,35,962Source: Estimated by the Dte. of Industries, GNCTD.80 ECONOMIC SURVEY OF DELHI, 2001-2002

Chart 9.1Source : Dte. of Industries, GNCTD,* Estimated by Dte. of Industries, GNCTD,Source : Census DataChart 9.3Source : Estimated by Dte. of Industries, GNCTDChart 9.2ECONOMIC SURVEY OF DELHI, 2001-2002 815. The Industries Department is running a Tool Room & Training Centre with Danish collaborationatWazirpur Industrial Area with the objective of contributing towards the development of small scaleindustries through supply of trained man-power and sophisticated tooling. A Hi-Tech VocationalTraining Centre has been set up with Italian collaboration at Okhla Industrial Area for providingtraining on CNC machines and for providing machining facilities to small scale industries.6. In order to make the National Capital Territory of Delhi a world class cyber state, the DelhiGovernment


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has planned to set up state-of-the art Hi-tech City for Information Technology on about 100 acresof land with the best communication links, uninterrupted and clean power supply with back uppower generation and other advanced technical facilities. A World Trade Centre is being set up toprovide instant information flow and interaction amongst various players in international trade &commerce. With a view to establish and develop Industry-University-R &D linkages, a Bio-TechnologyPark is being set up in collaboration with Delhi University which will help in the upgradation of

technology of existing industries and development of high-tech and non-polluting industries inDelhi.7. The index of industrial production (1980-81 base year) shows an increasing trend until 1995-96.It hasdeclined from 1996-97 onwards because major industrial units were closed on orders of theSupremeCourt. The average index of industrial production, which was 217.72 in 1994-95, increased to235.90in 1995-96 registering a growth of 8.35 per cent. However, it declined to 205.14 in 1996-97 and196.00in 1997-98. The index recovered to 205.68 in 1998-99. The Time series containing index ofindustrialproduction data with base year 1980-81 in Delhi is given below :-Statement 9.2

INDEX OF INDUSTRIAL PRODUCTION IN DELHI ( Base Year 1980 - 81 )Year Index % over previous year

Source: Directorate of Economics & Statistics, Government of NCT of Delhi82 ECONOMIC SURVEY OF DELHI, 2001-20028.

Year index

0

1

2

3

4

5

6

Category 1 Category 2 Category 3 Category 4

Series 1

Series 2

Series 3


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2000-2001 173.82

2001-2002 189.03

2002-2003 187.83

2003-2004 192.57

2004-2005 197.91

2005-2006 217.72

2006-2007 235.90

2007-2008 205.14

2008-2009 196.00

2009-2010 205.68


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0

50

100

150

200

250

IN UST IALG OWTHOF DELHI

NDEX


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CORRELATION

Correlations

Purpose (What is Correlation?) Correlation is a measure of the relation between two or

more variables. The measurement scales used should be at least interval scales, but other

correlation coefficients are available to handle other types of data. Correlation coefficients can

range from -1.00 to +1.00. The value of -1.00 represents a perfectnegative correlation while a

value of +1.00 represents a perfect positive correlation. A value of 0.00 represents a lack of

correlation.

The most widely-used type of correlation coefficient is Pearson r, also called linearorproduct-momentcorrelation.

Simple Linear Correlation (Pearson r). Pearson correlation (hereafter called correlation),

assumes that the two variables are measured on at least interval scales (see Elementary

Concepts), and it determines the extent to which values of the two variables are "proportional"

to each other. The value of correlation (i.e., correlation coefficient) does not depend on thespecific measurement units used; for example, the correlation between height and weight willbe identical regardless of whether inches andpounds, or centimeters and kilograms are used asmeasurement units. Proportionalmeans linearly related; that is, the correlation is high if it can

be "summarized" by a straight line (sloped upwards or downwards).


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This line is called the regression line or least squares line, because it is determined such that

the sum of the squareddistances of all the data points from the line is the lowest possible. Notethat the concept ofsquareddistances will have important functional consequences on how the

value of the correlation coefficient reacts to various specific arrangements of data

Correlation analysis

Use the Correlation transformer to determine the extent to which changes in the value of anattribute (such as length of employment) are associated with changes in another attribute (such assalary). The data for a correlation analysis consists of two input columns. Each column containsvalues for one of the attributes of interest. The Correlation transformer can calculate variousmeasures of association between the two input columns. You can select more than one statistic tocalculate for a given pair of input columns.

The data in the input columns also can be treated as a sample obtained from a larger population,and the Correlation transformer can be used to test whether the attributes are correlated in thepopulation. In this context, the null hypothesis asserts that the two attributes are not correlated,and the alternative hypothesisasserts that the attributes are correlated.

The Correlation transformer calculates any of the following correlation-related statistics on one ormore pairs of columns:

Correlation coefficient r

The correlation coefficient r is a measure of the linear relationship between two attributes

or columns of data. The correlation coefficient is also known as the Pearson product-

moment correlation coefficient. The value ofr can range from -1 to +1 and is independentof the units of measurement. A value ofr near 0 indicates little correlation between

attributes; a value near +1 or -1 indicates a high level of correlation.

When two attributes have a positive correlation coefficient, an increase in the value of oneattribute indicates a likely increase in the value of the second attribute. A correlationcoefficient of less than 0 indicates a negative correlation. That is, when one attributeshows an increase in value, the other attribute tends to show a decrease.


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YEAR IND

RIAL

GR

INDIA

IND

RIAL

GR

DEL I

R1 R2 D2=(R1-R2)

2

2000-2001 162.6 173.82 1 1 0

2001-2002 167.0 189.03 2 3 1

2002-2003 176.6 187.83 3 2 1

2003-2004 189.0 192.57 4 4 0

2004-2005 204.8 197.91 5 6 1

2005-2006 221.5 217.72 6 9 9

2006-2007 247.1 235.90 7 10 9

2007-2008 268.0 205.14 8 7 1

2008-2009 275.4 196.00 9 5 16

2009-2010 304.1 205.68 10 8 4

D2= 42

Definition:

An index number in which the component items are weighted according to some system of weights

reflecting their relative importance. In one sense nearly all index numbers are weighted by implication; for

example, an index number of prices amalgamates prices per unit of quantity and the size of these units may

vary from one commodity to another in such a way as to constitute weighting.

It is, however, usual to describe an index as weighted only when weighting coefficients enter explicitly

into its definition and calculation.

Definitions ofindex numberon the Web:


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y index: a number or ratio (a value on a scal e of measurement) derived from aseries of observed facts; can reveal relative changes as a function of timewordnetweb.princeton.edu/perl/webwn

y An index number is an economic data figure reflecting price or quantity comparedwith a standard or base value. The base usually equals 100 and the index numberis usually expressed as 100 times the ratio to the base value. ...en.wikipedia.org/wiki/Index_ number

y a number issued by the county clerk, which is used to identify a case - in civil courtthere is a charge of $45.00www.courts.state.ny.us/courts/nyc/civil/definitions.shtml

y The number of the tooth on the index gear. Teeth are numbered consecutively inwhole numbers, starting from the highest number, which is also number zero,around the gear. Top of Pagewww.usfacetersguild.org/dictionary.shtml

y A measure of the relative changes occurring in a series of values compared with abase period. The base period usually equals 100, and any changes from itrepresent percentages. ...www.iowaworkforce.org/LMI/lmidirectory/main/HTMs/defs/glos -i.htm

y Case number used to identify and requisition foreclosure file of the case for

examination.www.nyforeclosures.com/resources/glossary.html

number from 1 to n of an object into a father one.

www.kb.bam.de/tsl-doc/TSLdefinitions.ecu.html

CALCULATIONS

Coefficient of correlation

r =1- 6D2


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N(N2-1)

r = 1 6 *42/10(102-1)

= 0.7454546

= 0.745 approx

ANALYSIS OF THE CORRELATION

Value of r is positive that means with the increase in the industrial growthof

elhi, industrial growth of India increases and means with the decrease in

the industrial growth of elhi, industrial growth of India decreases

Value of r is 0.745 that means they are strongly correlated.

Value of coefficient of correlation r varies between -1 to +1.


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correlation between industrial growth of india and delhi

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