indian economy features and development

7/30/2019 Indian Economy Features and Development

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Presented To:

Mr. Shekhar Stephen DCruze

Presented By:

Simerjot SinghX-A


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INTRODUCTION The India is the ninth largest in the world by nominal

GDP and the fourth largest by Purchasing Power Parity.The independence-era, Indian economy was inspired by

the economy ofSoviet Unionwith socialist practices, largepublic sectors, high import duties and lesser privateparticipation characterizing it, leading to massiveinefficiencies and widespread corruption. However, in 1991,

India adopted free market principles and liberalizeditseconomy to international trade. Following these strongeconomic reforms, the country's economic growthprogressed at a rapid pace with very high rates of growthand large increases in the incomes of people.


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Beneficial Effects of the Reform

Process Fourth Largest Growing Economy in terms of PPPwith a GDP of US $3.36 trillion

In Exchange terms , Tenth Largest in the world with

a GDP of US$ 691.87 billion (2004) Second Fastest Growing Major Economy of the

World with a growth rate of 8.1% for the 1stQ of 2005-06


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Features1. The Indian economy is a developing economy. Its a mixedeconomy in the sense that both private sector and public sectorcoexist and participate in the production process.

2. It is characterized by high population density and population

growth.3. About one-third of the population live below poverty line. 'Viciouscycle of poverty' operates in many sectors of the economy.

4. There is high level of unemployment and underemployment Inaddition, there is 'disguised unemployment' in the agriculturalsector.

5. The level of technologyused in production process is low in manysectors. Modern technology has not been adopted in all sectors ofthe economy.

6. There is a shortage ofphysical and economic infrastructure.


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India's SWOT analysis

STRENGTHS

High savings/investment , forex reserves, quality talent andIT, broad based and growing entrepreneurial class, marketsize, macro economic and financial stability, language,democracy and political system stability

WEAKNESSES

Physical infrastructure, human development indicators,agriculture, shortage of skilled manpower

OPPORTUNITIES Demographic dividend, knowledge based growth ,

increased integration with world economy, urbanizationTHREATS

Global Uncertainty, fiscal deficit, climate change energyand food security, regional and social inequalities


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Socialist policies minimal private sector role

Bureaucratic

Protected market

Small consumer markets

Underdeveloped infrastructure

One of the fastest growing economies ; 9%+

growth rate for 5 years prior to current crisis

Resilient Economy 5-6% growth at the peak ofthe global crisis

Opening up sectors for investment

Promising consumer markets

Significant investment in infrastructure

development

YESTERDAY

TODAY

Largest democracy; Stable government.

Dominant private sector; Increasing withdrawal of

government from business

Robust banking sector; Capital markets

World class IT & telecom infrastructure

A connected economy; Economic efficiency & quality

of governance

An Enabling Environment


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Reason for the highest growth

rates in the mid-2000s The growth was led primarily due to a :

huge increase in the size of the middle class consumer

population(AVERAGE working age being 25) a large workforce comprising skilled and non-skilled

workers(NAREGA scheme)

improvement in education standards(mid-day meal

for rural) and considerable foreign investments(FDIsand FIIs).


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Major issues of Development Low per-capita income

Income inequalities

High incidence if poverty

Predominance of agriculture and instability of output Rapid population growth

High dependency ratio

Low level of human development

Unemployment Imbalance between population size, resources and capital

Inadequacy of entrepreneurs


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Changing scenario of Indian

economy Growth of national income

Rise in per-capita income

Structural transformation Expansion of social capital

Slowly changing occupational distribution of population

Growth of basic capital goods industries


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h

Period 1950-1980

1980-1990

1990-2000

2000-2012

AnnualReal

GDP

Growth

3.7% 5.9% 6.2% 6.8%

Annual

Real

GDP per

Capita

Growth

1.5% 3.8% 4.4% 5.8%

Indias Real GDP

Growth


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INDIA and Global Economy - Prospects

-5

0

5

10

15

20

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

World Advanced Economies Emerging & Developing Economies

Forecast for 2010 and 2011

Percent


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I ndian Economy - Growth Trajectory

Average GDP growth at 8.9 per cent during 2003-08

Real GDP grew at 8.8 per cent in 2010-11 (Q1) (6.0 per cent in 2009-10 (Q1))

RBI places real GDP growth forecast at 8.5 per cent for 2010-11

Pe

rcent

0.0

2.0

4.0

6.0

8.0

10.0

12.0


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INDIAN ECONOMY: BROADFEATURES

Employment Poverty

Investments

Infrastructure

Agriculture

Financial sector


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indian economy features and development

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