a study of economic growth of india

8/7/2019 A STUDY OF ECONOMIC GROWTH OF INDIA

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A Study of Economic Growthof India: Opportunities and

Threats

Team Name-The Devoter

Team Member- Tanvi Gupta, Bulbul Sharma

PGDM (1st Semester)

Ajay Kumar Garg Institute Of Management


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Trends of Economic Growth ofIndian Economy up to Fiscal

Year 2007-08


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Gross Domestic ProductIndia's GDP at Constant Prices: 200207

469556

638737

838068

0

200

400

600

800

000

200

200203 200304 200405 200506 200607 200708*

US

DBillio

Fastest GDP growth of 9.6 percent in 200607, since last 18 years (at constant prices)

Indias GDP has witnessed high growth andit becomes India, the second fastest growingGDP after China in 2007-08


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Growth in Sectors

Contribution ofServices - increasedfrom 48 percent to 53

percent

Contribution ofServices - increasedfrom 48 percent to 53

percent

USDBi

i

gr ic u tu r e n d u str S e r v ic e s

Growth in sectors at Constant Prices(200708):Industry: 10.8%Services: 8.5%Agriculture: 4.5%


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Foreign Exchange Reserve

In 2007-08, Forex reserves witnessed a growth of approximately 56percent over 2006-07.The Foreign Institutional Investors brought S$ 16.1 billion in2007-08.

India's Forex Reserves 2001 08

S

illio


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Exports

India's Exports: 200208

USDBill

ion

Exports grewby 23.02% during 2007-08amounted to USD$155.5billion.


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Imports

India's Imports: 200208

USD

Billi

Imports increasedby 27.01% during 2007-08amountedto US$ 235.9 Billion


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Opportunities

Indo-US Nuclear Deal

Mergers and Acquisitions

Young population

Expansion of middle class

Foreign direct Investment


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Indo-US Nuclear Deal

Indo- S Nuclear eal has signed on thOctober,

Since nuclear energy can be used to

generate power,

it appears that the deal could help meetthe shortage

Closer political cooperation with US shalllead to closer economic cooperation withUS and other developed countries.


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Major M&A Deals Undertaken byIndia Inc.

US 12.1billionUS 12.1billionTata Steel buys Corus PlcTata Steel buys Corus Plc

US 6 billionUS 6 billionHindalco acquired Novelis Inc.Hindalco acquired Novelis Inc.

US 1.58 billionUS 1.58 billionEssar Steel acquired Algoma

SteelEssar Steel acquired Algoma

Steel

US 1.6 billionUS 1.6 billionSuzlon Energy Ltd. acquires

EpowerSuzlon Energy Ltd. acquires

Epower


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Indian Companies Fuelling FutureExpansions

US 0.2billionUS 0.2billion

US 0.5billionU

S 0.5billion

Plans to invest in its global

expansion efforts

Plans to invest in its global

expansion efforts

Plans to invest in the Ugandamarket

Plans to invest in the Ugandamarket

Plans to provide services inthe Sri Lanka market

Plans to provide services inthe Sri Lanka market

OverUS 2billion

OverUS 2billion

IL is planning to invest in itsrecently acquired polyester

manufacturing facility in NorthCarolina

IL is planning to invest in itsrecently acquired polyester

manufacturing facility in NorthCarolina

US 0.215billion

US 0.215billion


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Young Population

By 1 almost half of our citizens will bein the working age group of - yearsleading to a massive increase in

employable manpower.


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Foreign Direct Investment and JointVentures

The Government has increased FDI Capsin nearly all of the sectors.

In span of 1 years FDI has increased

There has been a significant increase in

the number of joint ventures betweenIndian corporate and Foreign Multinationals bringing in capital and the best oftechnology.


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Threats

Poor Infrastructure

China

Political Situation

Bureaucratic situation, procedures

and government policies

Economic Terrorism


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Poor Infrastructure

Indias spending on infrastructure is $ 1 billion or% of GDP, compared to Chinas spending of

$ billion or % of its GDP.

Ports: Inadequate berths, low drafts and poorrail/road connectivity add to cost and delays

Airports: Inadequate runways, aircrafts handlingand terminal buildings cause congestion


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Railways: Old technology, slow speed, saturatedand low payloads curb operations and growth

Power: 1 % peak deficit, 1 % energy shortage,% transmission and distribution losses

Telecom: Despite its obvious success, telecom

services only 1 % of the addressable market


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China

Emerged as alternative to India forFDI

Emerging as a partner in economic growthof other south Asian countries and otherdeveloping countries

Flooding our own market with its goodswhich at times amounts to dumping


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Political Situation

The current situation in the country isnot very conducive for free economicgrowth


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Bureaucratic structure, procedures& Government policies

Bureaucracy, official procedures andgovernment policies are still not verysupportive of free economic growth.


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Economic Terrorism

USD 1 billion worth of counterfeitcurrency, according to India's Intelligence

Bureau

USD1 . billion worth of counterfeitcurrency, according to RBI statistics

USD , worth of fake notes from theState Bank of India branch in Domariaganj


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Conclusion

The current economic growth and situationsuggests that India is all poised for achieving itsvision of becoming a developed nation but thisshall require the economic growth rate to come up

in double digits, easing of government policies andprocedures, elimination of bureaucratic structure,political stability, reduction of unemployment andcloser economic co-operation with developing aswell as the developed world. India Inc. needs to

rethink as to how they can enhance theircompetitiveness and expand their business basein a globalize economy.


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a study of economic growth of india

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