GDP vs. B - school

Under guidance of guidance of, Dr. S. BisaliahM.A (Economics), Ph.D (USA)

By ,Pallav kumar sinha

GDP…. ?? Gross domestic product (GDP) is an aggregate

measure of the total economic production for

a country .

It is the total “Market value” of “all

final” “goods and services” “produced” “within

a country” in a “given period of time”.

This definition has four parts:

Market value

Final goods and services

Produced within a country

In a given time period

Market valueGDP is a market value—goods and services are valued at their

market prices.

e.g. To add apples and oranges, computers and popcorn, we add the market values so we have a total value of output .

Final goods and services

GDP is the value of the final goods and services produced.

i.e. A final good (or service), is an item bought by its final user during a specified time period.

Produced within a country

i.e. GDP measures production within a country—domestic Production (either done by its own citizens or by foreigners located there)

In a given time period

i.e. GDP measures production during a specific time period,

normally a year or a quarter of a year.

Calculating GDP ..1. Expenditure method i.e. expenditure by households , firms and governments

together . Four components:1. Consumption (C)2. Investment (I)3. Government Purchases (G)4. Net Exports (NX)5. GDP(Y)

2. Value-added method : Add “value - added” by firms together . i.e value – added =

value of goods produced by firm – value of intermediate goods used to produce it.

3. Income method : National income is obtained by summing up the national income of all individuals of a nation.

GDP at factor cost = rent + wages +interests + profits

Real and Nominal GDP

Nominal GDP values the production of goods and services at current prices.

It is not corrected for inflation Real GDP values the production of goods and

services at constant prices or base year price .It is corrected for inflation

We use real GDP to calculate the economic growth rate. The economic

growth rate is the percentage change in the quantity of goods and services

produced from one year to the next.

The Gross Domestic Product per capita in India was last recorded at 5238.02 £ in 2013, when adjusted by purchasing power parity (PPP). The GDP per Capita, in India, when adjusted by Purchasing Power Parity is equivalent to 29 percent of the world's average. GDP per capita PPP in India averaged 3074.12 USD from 1990 until 2013, reaching an all time high of 5238.02 USD in 2013 and a record low of 1795.44 USD in 1991. GDP per capita PPP in India is reported by the World Bank.

GDP and Economic well being GDP is the best single measure of the economic well-being of a society. Real GDP per capita is the main indicator of the average person’s standard of

living. Higher GDP per person indicates a higher standard of living. But GDP is not a perfect measure of well-being . It measures everything, in short,

except that which makes life worthwhile, and it can tell us everything about India except why we are proud that we are Indians.”

As it doesn’t counts : i. The value of leisure.ii. The value of a clean environment.iii. The value of almost all activity that takes place outside of markets,

such as the value of the time parents spend with their children and the value of volunteer work

iv. GDP excludes most items that are produced and consumed at home and that never enter the marketplace.

v. It excludes items produced and sold illicitly, such as illegal drugs

Impact of decreasing GDP

Lesser Demand in Market Hence Lesser Production Hence Fewer Jobs Hence Fewer Promotions Salary Cuts and even Lay Offs That is, Lack of Opportunities

MBA The MBA program originated in the United States in the late 19th

century as the country was undergoing rapid industrialization and companies sought out scientific approaches to management .

The program gained immense popularity in US and grew rapidly.

MBA entered in India in 1957.

Post liberalization period (post 1992) in India saw a surge in the no of B-schools. MBA became the most coveted professional degree. No of MBAs grew from a mere 700 per year in 1961 to 100,000+ in 2011

Growth trend ….

GDP growth rate in last ten years

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

5.4

3.9

87.1

9.5 9.6 9.3

6.7

8.6 8.9

6.7

4.5 4.7

GDP at Factor cost

Recession

National Bureau of Economic Research (NBER) defines it as:

“A significant decline in activity spread across the economy, lasting more than a few months, visible in industrial

production, employment, real income, and wholesale-retail trade”

“… and it begins just after the economy reaches a peak of activity and ends as the economy reaches a trough. Between

trough and peak, the economy is in an expansion

Recession ..

According to International Monetary Fund(IMF),

“Recession is the economy shrinking for two consecutive quarters (6 months) with a

decrease in the GDP”

Recessions 1925 - 2001

Period Time (in months)October 1926 to November

192713

August 1929 to March 1933 43May 1937 to June 1938 13February 1945 to October 1945

8November 1948 to October 1949

11July 1953 to May 1954 10August 1957 to April 1958 8April 1960 to February 1961

10December 1969 to November 197

11November 1973 to March 1975

16January 1980 to July 1980 6July 1981 to November 1982

16July 1990 to March 1991 8March 2001 to November 2001

8

Recession .. Thus we can say Recession is not a new thing but a regular phenomenon

that occurs from time to time .In fact, the world has already seen around 14 recessions since 1925 and They have lasted, on an average, for around 13months!!!

The global recession in 2008-2009 was a bitter shock to the MBA graduates, as many lost their jobs and businesses went bankrupt. But in the post recession period, the demand for quality MBAs has revived, with even better roles and salaries. This shows that MBA is here to stay and that MBA is not a dying program, rather it is still in its growth phase .

Advantage of being an MBA graduate.. MBA as a degree evolved due to the needs generated by the rapid industrialization in US.

Hence its utility lies in the basic need of the industry – scientific approaches in management.

MBA empowers professional with an in depth knowledge and prowess of specific areas such as Finance, Marketing, HR etc.

MBA’s with their knowledge and skills help industries develop better processes, provide better services, bring in novel ideas and inculcate innovation – thereby making the business more profitable.

With rapid advancement in Technology the requirement for more adaptive and technologically well versed MBAs is becoming imperative. As MBA is constantly evolving and aligning itself with these needs, recruiters are getting the right fits from the MBA graduates.

Over the years MBA graduates have grabbed the highest compensation packages from the leading players in the industry-which shows the continued confidence of the industry in their abilities and their utility

Demand for MBA graduates.. In India, for example, a country with an economy booming along at around

4.8 per cent GDP growth, starting salaries are shockingly low. Indian citizens who graduated from full-time two-year MBA programs earn an average starting salary of $34,988, according to GMAC’s report.

The development economics suggests that during the stages of development share of service sector in the GDP increases with the development while that of primary sector decreases. With services leading the world economic growth, they are being regarded as the engine of growth as well as the necessary concomitant for economic growth. 

India's economy which grew 5.7 per cent in the April-June quarter, highest in the past two-and-a-half years, India Inc. today said it expects the GDP to pick up further on the back of conducive investment policies and execution of reforms by government.

Contd …

"It (the GDP) will only pick up further and the Indian economy is well poised to reach six per cent or may even cross the six per cent mark for the full financial year 2014-15," Assocham President Rana Kapoor said.

India’s own GDP is poised to expand by as much as four times during the next 10 years, so will be the need for business leaders. These leaders need to be groomed to be successful in the Indian culture.

MBA specializations with emerging Scope MBA in Hospital Management MBA in Entrepreneurship MBA in Real Estate MBA in Information Technology MBA in International Business MBA in Communications MBA in HR.

Requisites for a good manager

B.E. (Mech)

Karnataka Regional

Engg. College

B.A. (Eco) St.

Stephen’s College

B.Sc. (Physics)

Kerala University

B.A. (Eco) St.

Stephen’s College

B.Sc. (Chem) Madras

Christian College

MBA IIM - A

MBA FMS

MBA IIM - C

MBA IIM – A

MBA IIM - C

Former MD ICICI Bank

Former MD

Microsoft

Founder & CEO

Rediff.com

Founder & CEO

Naukri.com

CEO PepsiCo

K.V. Kamath

Neelam Dhawan

Ajit Balakrish

nan

Sanjeev Bhikchan

daniIndra Nooyi

Placement TrendsPLACEMENT TRENDSYEARS (CLASS OF)

2010 2011 2012 2013 2014

Class size 568 569 574 762 766

Avg. Age 27 27 27 27 27

Avg. Work Exp. 5 5 5 5 5

No. of Students 552 552 559 741 759

No. of Companies 346 310 348 423 350

Total offers 541 661 631 819 884

International offers 60 84 92 63 68

 

Students taken admissions at MPBIM

Chart TitleChart Title

Students admitted to MPBIM

120 124 130122 119 119

180 178

134146

2005-07 2006-08 2007-09 2008-10 2009-112010-12 2011-13 2012-14 2013-15 2014-16

Placements happened

Placements occurred

848791858384

126122

0 0

Chart Title

2005-07 2006-08 2007-09 2008-10 2009-112010-12 2011-13 2012-14 2013-15 2014-16

GDP at F

actor

cost

Year

Stude

nts ad

mitted t

o MPB

IMYea

r

Placem

ents

occurr

ed0

20406080

100120140160180

2001-02

2003-04

2005-06

2007-08

2009-10

2011-12

2013-14

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-082008-09 2009-10 2010-11 2011-12 2012-13 2013-14

Industry-wise Total Offers (percentage)

INDUSTRY WISE 2010 2011 2012 2013 2014

Consulting 27 32 30 21 20

Banks/Financial Services 16 12 4 9 8

FMCG/Retail/Consumer Durables 3 4 8 4 2

IT/ITES 26 24 28 37 28

Diversified 2        

Chemical/Fertilizers/Pesticides     1 1 1

Real Estate/Infrastructure/Construction 6 5 2 4 3

E-commerce         9

Education/Training/Teaching     1 1 1

Engineering         3

Govt/PSUs/NGOs/Forces/Services   1      

Manufacturing   4 6 4 3

High Technology Electronics/Service 2 0 1 1 1

Oil/Energy/ Petroleum/Minerals 4 5 1 2 2

Pharma/Biotech/Healthcare/Hospitals 4 4 7 7 9

Advt/Media/Comm/PR/Entertainment 2 3 1 2 5

Telecom     3 1 2

Others 8 6 7 5 3

Insurance     0 1  

Function-wise Total Offers (percentage)

FUNCTION WISE  2010 2011 2012 2013 2014

Consulting 31 36 35 27 24

Finance 14 12 6 7 8

General Management 10 12 13 12 20

Technology 16 5 4 6 2

Sales & Marketing 17 20 23 21 18

Business Research  2 1      

Others 5 8 10 14 19

Operations 5 5 6 7 8

Human Resources   1 1 1  

Analytics     1 4 1

Engineering     1 1  

 

Conclusion

So we can say this is the correct time to make a wise decision and nurture our

future in a better way by joining MBA and excelling in academics

“Education is a very crucial investment;

especially at this time”

Thank you