india model of growth

8/6/2019 India Model of Growth

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INDIAMODEL OF GROWTH


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India is Sparkling

But

which Model of Growthshould we choose


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Model of GrowthAmerican Model of Growth OR

Russian Model of Growth OR

Chinese Model of Growth OR

INDIAN MODEL OF GROWTH


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Let Us Look Back250 years back before British rule Indiawas controlling 25% of World Trade

When British left we were controlling2.5% of world trade

In 1991, before liberalization, we were

controlling 0.4% world trade


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Let Us Look Back16 years after economic liberalizationwe control only 0.8% world trade

Whereas China today controls 2.5%world trade

Between 1947 and 1991, the country

followed socialistic pattern of Society(Russian Model)


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Let Us Look BackImport, Export, Production Capacity allregulated through license. Foreign

companies had to dilute their Equity to40%

Economy grew only at 3.5% per annum

resulting in low rate of increase in percapita income


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Let Us Look BackWe remained one of the poorest countryof the world

One third of our population remainingbelow the poverty line


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Let us Look BackNot only our per capita income is low,in terms of Human Development Index

(HDI) India ranks 139 out of 174countries

HDI is an index created on a scale of0-

10

measured by 3 components longevity, knowledge and income,each measured by several parameters


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India Since New

Economic Policy (1991)We are now growing @8% per annum

Foreign Exchange Reserves have

touched 210 billion dollarsExports reaching US$ 100 billion

Overall Optimism in the air and all the

developed countries are ready to investin India

Will India be sparkling?


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THEN,IS EVERYTHING O.K.?


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Let us Scratch

the SurfaceQuality of Life as measured by HDI,India currently ranks 127 out of 177

Out of a total of over 1000 million 240million people are middle class andabove.

270 million are living below the povertyline without two square meals a day


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Let us Scratch

the SurfaceSharp increase in mafiaraj, terrorism,separatism and Naxalite movements

Environmental warming & pollution havereached alarming level

Over2 lac villages still do not have

drinking water


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Let us Scratch

the SurfaceUnderground water level is receding at a fastrate due to rapid withdrawal of water for

multiple croppingSanitary conditions, primary education,primary health services and village roads arein pathetic states

Trade gap is increasing due to sharp increasein volume and price of petroleum crude


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Let us Scratch

the Surface75% of our Petroleum Crude is imported

Global warming causes extreme

weatherIn 1988, 1999, 56 countries haveexperienced catastrophic floods (China

& Bangladesh)Antarctica is 2.5 degrees Celsiuswarmer than in the mid 1940s


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Let us Scratch

the SurfaceIn October 1998, a 7125 sq. kilometerblock separated from the Ronna Ice

shelfIf the West Antarctica Ice Sheet breaksoff, sea levels could rise 5 meters withina decade

In the India sub-continent, 2/3rd ofBangladesh was under water in 1998.


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Let us Scratch

the SurfaceOrissa faced a devastating cyclonekilling 10,000 people

Our forest area has shrink to analarming level of 11% against minimumof20% for ecological balance

Automobile pollution is suffocating allmajor cities with rapid increase inrelated diseases


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SO IF INDIA HAS TO SPARKLE

YET NOT CREATE DISASTERS!

We have to blend Western EconomicModel co-terminus with Eco-friendly,

Sustainable & Employment orientedgrowth model


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WHERE DO WE GO

FROM HERE


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SHOULD WE ABANDON

THE EXISTING GROWTH

MODEL FREEECONOMY MODEL


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Free Economy ModelCompanies / organization survive and flourishunder free competition

As a result, companies acquire corecompetence using latest technologies andmassive economy of scale requiring minimumhuman intervention

Stress is on quality, efficiency andproductivity keystones of material prosperity& higher standard of living


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Free Economy ModelThe focus of the business is to servethe customers to their fullest satisfaction

at the lowest possible price leading tohigher share of market

Higher share of market leading to higherrate of return on Shareholders Capital

Economy is driven by the market forcesand consumerism


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Impact of

Free Economy ModelMaterial prosperity invariably have ledto higher level of consumption of energy

generated from organic fuel

This has led to global warming throughgeneration of unabsorbed green house

gases


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India a Growth DynamoIndia is second in terms of rice, wheat,groundnut and tobacco and third in

cotton

India is blessed by nature with plenty ofsunshine, rainfall and moderate climate


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India a Growth DynamoIndia is blessed by nature with plenty ofsunshine, rainfall and moderate climate

Moderate climate ensures three to four cropsper year in irrigated land

But our yield per crop is only 30% of worldstandard

Scope for 3 to 4 fold increase by proper useof inputs and services & management


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India a Growth DynamoAt current level of productivity, our agricultureproduce one of the cheapest in the world

Our export growth of 16% per annum overlast 10 years largely been derived from cotton& silk textiles, jute products, tea, coffee, rice,spices, herbal drugs, fruits and vegetables,

floriculture, pisciculture, oilseeds, tobaccobased products


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India a Growth DynamoBecause of our strength of bio-diversity, wecan protect 50% of our working population in

AgricultureApart from retaining them in this Sector, wecan improve their real earning throughincreased productivity

In the next 6/7 years India could become thelargest exporter of agriculture and agro-basedproducts


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Indian Model of GrowthMust be globally competitive

Eco-friendly

Sustainable

Employment oriented

Less Capital Intensive


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Priority Sectors of

Indian Model of GrowthAgriculture & Agro based Industries

Tourism

Information Technology

Gems, Jewellery & Handicrafts

Entertainment Industries


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Priority Sectors of

Indian Model of GrowthPharmaceutical & Healthcare

Higher Education

Alternative Energy

Precision Equipment


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Agriculture & Agro

based IndustriesOut of 320 million workforce (1/3rd oftotal population) 170 million (53%) are

employed in AgricultureIndia ranks 2nd in the world in terms ofusable land as also irrigated area

India ranks number 1 in the world withrespect to production of milk and milkproducts, sugar and tea


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TourismIndia has 5000 years of civilization

6000 miles of coast line

Tallest mountain range

Yet India attracted 2.29 million (0.39%)of World tourists

Indias tourist traffic is only 30% ofSingapore and Malaysia

Needs Infrastructure Development


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Information TechnologyOur export from IT and ITES has nowreached US$ 423.6 billion in 2006

Total employment in IT & ITES hascrossed 1.6 million in 2007

IT & ITES exports is likely to double in

next 3 yearsSilicon Valley would not come up - hadthere been no IITs in India


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Gems, Jewellery &

HandicraftsGems & Jewellery accounts for over30% of our total exports.

Growth potential is very high

Gems, Jewellery & Handicrafts are highskill labour intensive areas where India

is globally competitive


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Entertainment

IndustriesEntertainment Industry meets five criterion ofbeing globally competitive, eco-friendly,

employment oriented, sustainable andrelatively less capital intensive

Demand for Indian films are now becomingpopular in China & Russia

Huge prospects exist for Multimedia andAnimation Services

Potential of Entertainment Industry is huge


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Pharmaceutical &

Health CarePharmaceutical Industry is another skill& knowledge based Industry where

India has huge potentialWe have great talent in PharmaResearch & Development and India has

the potential to be world leader


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Pharmaceutical &

Health CareIn the area of Biotechnology & HerbalDrugs India has large potential

India will also emerge as a global hubfor Clinical Research

Huge scope exist to attract investment

in Contract Research


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Pharmaceutical &

Health CareThe dormant Indias rural market willprovide enormous opportunities for

Pharma Industry in IndiaDemand for Health Care Services isgrowing at a phenomenal speed

Modern Hospitals & Diagnostic Centresin Metros are full of customers


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Higher EducationMajor scope exits in creating infrastructure forhigher education for students from abroad

Our IITs, IIMs, NIITs, leading universitiesand other top private institutions can competewith best of the institutions in the world.

Since our fees 30% cheaper than similar

institutions in Europe and North America, wecan earn considerable Foreign Exchange inthis account


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Alternative Energy

Alternative Energy Sector is another areawhich needs utmost priority

Since Global Warming is due to Green HouseGases emanating from burning of fossil fuellike petroleum crude and coal, scope of usingalternative energy sources like nuclear fissionand fusion, hydro electric, solar, wind, bio-mass, geothermal is large and huge prospectfor development and commercial exploitation


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Precision Equipment

Manufacture of Microprocessor chips,Computer Desktop, Laptop and

Communication Equipment like switches,routers, mobiles, robotics, process controlequipment, numerically controlled machinetools, automated diagnostic equipment,

miniaturized audio & video equipment,modern toys and video games etc. offer hugeopportunity for growth and development


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Precision Equipment

Precision Equipment Sector do not consumehuge energy but requires high investment

Precision Equipment Sector requires highdegree of computer software skill where wehave global competitive edge


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India Model

Blend of Best of Globalization and

Swadeshi Competitive Strength

Developed world has taught us how toorganize efficiently using IT and

Biotechnology in a market economyIndian tradition advocates a holisticapproach with respect to human

happiness through a balanced view onenvironmental protection anddistribution of purchasing power


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India Model

Blend of Best of Globalization and

Swadeshi Competitive Strength

We should work towards higherstandard of living but with a drastic

reduction of people living below thepoverty line while maintaining ourecological balance

Hence we should not copy American orEuropean model or Chinese model butadopt Indian Model of Growth


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THANK YOU

india model of growth

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