India’s economic potential is NOT overstated/overrated Neha Pathak Sai Pooja Amar Ankita Tiwari Akthar Raza Sai Krishna Chaitanya Potharaju HG Arthur Denzlin Afzal Hussain
“India will become the third largest economy in the world after China and the United States of America by 2025” Graeme Wheeler, Managing Director World Bank “India is poised to emerge as the third largest economy in the world after US and China by 2025.” NareshwarDayal, Indian High Commissioner to Britain
Agenda Forecast HG Arthur Denzlin RBI’s Efficiency, Budget and Entrepreneurship Ankitha Tiwari Agricultural, Industrial & Service sectors Saikrishna Chaitanya FDI and Retail Attractiveness Akthar Raza Macro Economic variables Neha Pathak HDI and Human Resource Saipooja Amar 10 areas where reforms are needed Afzal Hussain
BRIC Report By 2025 the Indian economy is projected to be about 60 per cent the size of the US economy. The transformation into a tri-polar economy will be complete by 2035, with the Indian economy only a little smaller than the US economy but larger than that of Western Europe.
Tri Polar Economy
Forecast Source: Goldman Sachs report
If this is overstated, then see this??Growth rate of GDP of 6.9%
INDIA’S EFFICIENT RBI During the recession times , RBI came up with effective monetary polices. Ensured appropriate liquidity in the system, consistent with objective of price and financial stability.
BUDGET 2010-2011 Increased the tax base and DTC leading to relief for the middle and the salaried class. ‘A coin gains more value as it changes ownership’. Government committed to growth of SEZs. Four-pronged strategy for growth of agricultural sector. Emphasis on infrastructure pumping and withdrawal of subsidies. Given scope to private business . Private banking, mining, small industries are in scope.
Entrepreneurship Source: World Development Report, 2005 (World Bank)
Entrepreneurship helps Economy… Generate Employment Revenues for the Government Inclusive Growth New Technology Development of the society Gives higher purchasing power to the people of the country
Share of GDP
Sector 2009 GDP breakdown Agriculture 17.5% Services 62.6% Industry 19.9% Labor breakdown Agriculture 52% Service 34% Industrial 14%
Agricultural sector Agriculture is generally described as the backbone of Indian economy and is at the core of socio economic development of the country The agricultural sector contributes proportionally more to poverty reduction than growth in any other economic sector and that therefore alone, the focus should be on the agricultural sector
Reasons for the growth of Services and Manufacturing sector India opens up The rise of the financial sector Back-office to the world The Golden Quadrilateral The great migration
Attracting FDI “India has the highest returns on foreign investment” US Department of Commerce India 19.3% China 14.7% Thailand 13.0% “India is amongst the three most attractive FDI investments in the world.” AT Kearney FDI Confidence Index 2010
Retail Attractiveness India has been ranked 1st by AT Kearney in a Global Retail Development Index of 30 developing countries and is seen as a potential gold mine.
2009 A.T. Keareny Global Retail Development Index
Per capita income
Literacy Rate in India
Percentage of people under poverty line
By 2014-15, over 63 million households are expected to have an annual income of over US$ 6,000 per annum (US$ 30,000 in PPP* terms)
Unemployement in India
India in terms of HDI The HDI for India is 0.612, which gives the country a rank of 134th out of 182 countries Life expectancy at birth: 63.4years and ranked 128th Adult literacy rate: 66% and ranked 120th Combined gross enrolment ratio: 64% and ranked 134th GDP per capita(PPP): US$2753 and ranked 128th
HDI cont… There are 5,886.9 thousand migrants which represent 0.5% of the total population. Remittances are sent to immediate family members who have stayed behind, are among the most direct benefits from migration, the benefits spread broadly into local economies as they also serve as foreign exchange earnings for the origin countries of migrants. India topped in the inflow of remittances with US$ 35262millions of the total US$ 370billions.
With over 380 universities, 11,200 colleges and 1,500 research institutions, India has the second largest pool of scientists and engineers in the world. Over 2.5 million graduates are added to the workforce every year, including 300,000 engineers and 150,000 IT professionals.
10 areas where reform is needed Improve governance Raise educational achievement Increase quality and quantity of universities Control inflation Introduce a credible fiscal policy Liberalise financial markets Increase trade with neighbours Increase agricultural productivity Improve infrastructure Improve Environmental Quality