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Business cycle & economy growth in india since






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    Business cycle & economy growth in india since Business cycle & economy growth in india since Presentation Transcript

    • Business Cycle & Economy Growth in India since 1990s PRESENTED BY: Amit Kumar Dey Gaurav Agarwal Huzefa Calcuttawala Mondip Banerjee Sanjeev Jain Shrey Nagar Yusuf Hyderbhoy
    • What is Business Cycle ??
      • Business cycle (or economic cycle) refers to economy-wide fluctuations in production or economic activity over several months or years.
      • Fluctuations
      • Expansion or Boom Stagnation or Recession
      • 4 Stages of Business Cycle:
      • Start up/Creation
      • Growth
      • Maturity
      • Decline/Recession
      • 4 Phases of Business Cycle:
      • 1.Contraction, 2. Trough, 3. Expansion, 4. Peak
      • economics.about.com/cs/studentresources/.../business_cycle.htm
      • en.wikipedia.org/wiki/Business_cycle
    • Indian Economy Pre 1990s
      • The Economy-Overview of pre-1990s
      • India was in number 151 country among the all other countries of whole World with per capita income $373.08 million
      • Reasons of growth in Indian Economy during 1980s:
      • Private investors
      • Availability of raw materials
      • Low labour cost
      • Employment of bulk population
      • Availability of food grains
    • Indian Economy in 1990s
      • Economic Slowdown in 1990s
      • Possible reasons behind it:
      • Increasingly borrowing from foreign resources
      • Fail to reduce more substantially India’s widespread poverty
      • Collapse of Soviet Union
      • First Gulf war effect oil price
      • Growing inefficiency in the use of resources
      • Reservation of a proportion of public-sector jobs for SC,OBC
      • Hindu-Muslim conflict in Ajodhya
      • Delayed completation of Govt. projects
      • Administrative controls & Govt. policies
      • Cost overruns
      • www.indianchild.com/india_economy_growth.html
    • Changing economical scenario
      • Impact of implementation of LPG by reforming policies:
      • Per capita increased from US$132million in FY1992-93 to US$5.3billion in FY 1995-96
      • Rapidly rise of new industries
      • Excessive growth in sectors like telecommunications & aviation
      • Reasons for implementing LPG:
      • Stagnation of GDP
      • Emergence of huge public sector
      • Poor infrastructure investment
      • Corruption exists
      • Overprotection to industry
    • Liberalization , Privatization & Globalization
      • Liberalization:
      • It refers to the relaxation of previous government restrictions usually in areas of social and economic policies
      • Privatization:
      • It refers to the transfer of assets & service functions from public to private ownership or control
      • Globalization:
      • It refers to integrate the domestic economy to global economy
      • Effects of Liberalization & Privatization in Indian Economy:
      • Helps to improve the business by approving the entry of profit-making private sector
      • Make public sector more competitive
      • Helps in reviving the sick business units of public sector
      • Helps public sector to be efficient & improves the quality of decision making
    • L P G contd…
      • Effects of Globalization in Indian Economy:
      • Large variety of consumer goods, improved quality of goods
      • Markets have started responding to the movements abroad
      • External debt crisis reduced
      • Income from export is increased, growth of export has been more than 20% since FY2002-03
      • India’s share in the world export has improved
      • Increase in foreign currency reserves, improves from barely $1billion in FY1990-91 to about $180billion in FY2007-08
      • www.icai.org/.../16785Liberalization_Privatization_Globalization
    • Implementation of LPG
      • Reformation of regulations & policies by Govt.:
      • Loosening the government regulations
      • Declining the entry of production
      • Entry for private sector firms to enter into areas previously reserved for public sector
      • Reduction of price control, lowering of corporate taxes
      • Reduction of import tariffs, currency devaluation
      • Approval of foreign direct investments
      • Opening up the Indian equity market
      • Introducing SEBI act(1992)
      • Boosting better-paid employment
      • Spending more to improve infrastructure, education and basic services
      • independentindian.com/.../indias-monetary-fiscal-policy/
      • www.wsws.org/articles/2006/apr2006/suic-a28.shtml
      • en.wikipedia.org/wiki/Economic_liberalisation_in_India
    • Changing economical scenario
      • In 1990s
      • GDP: 5803.10 billion
      • GDP growth rate: 5.3%
      • Population below poverty line:
      • 40% of total
      • GINI Index: 0.30
      • Exports: near about $1 billion
      • Imports:
      • Unemployment:
      • Main Industries: textile, chemical, cement, steel, mining
      • www.indexmundi.com › India › Economy
      • www.economywatch.com › Indian Economy
      • In 2009
      • GDP: 1.242 trillion
      • GDP growth rate: 7%
      • Population below poverty line:
      • 22% of total
      • GINI Index: 36.8
      • Exports: $155 billion
      • Imports: $232.3 billion
      • Unemployment: 9.5%
      • Main Industries: telecom, food processing, textile, steel, transportation equipment, mining, petroleum, machinery, information technology
      • en.wikipedia.org/indianeconomy growth
    • Union Budget 2010
      • To take the GDP growth from 7% to 9% and finally cross the ‘double digit growth barrier’.
      • The Gross Tax Receipts are estimated to be Rs. 7,46,651 Crore and Non Tax Revenue Receipts at Rs. 1,48,118 Crore.
      • The proposed expenditure is Rs. 11,08,749 an increase of 8.6% over last year.
      • Launch of GST.
      • [ http://indiabudget.nic.in/ub2010-11/bh/bh1.pdf ]
      • The budget increased fuel prices and boosted the infrastructure sector.
      • Indian currency notes will have a distinct identity to distinguish it from other similar looking currencies.
      • [ http://www.india-server.com/magazine/budget-2009-3.html ]
    • Conclusion
      • LPG changed the Indian economy.
      • A distinct change in the Indian economy from the 1980’s to the 1990’s.
      • It is believed that India recovered from the downturn swiftly due to its smart but conservative policies.
      • Just like the business cycle the Indian Economy has been experiencing contractions and expansions.
      • After enjoying the expansion in the period of 2007-2008 it peaked and faced a contraction in 2008-2009, only to recover in 2009-2010 and commence its expansion route in 2010-2011.