INDIA’S ECONOMY ON WORLD’S PLATFORM By- Shobhit asai 9th International public school
India is 12th largest economy in the world by market exchange rate It’s also 4th largest economy in terms of PPP INTRODUCTION
History of India’s economy From ancient times, India drove world economy through spice trade, textiles etc In colonial era, India was bought under a taxation type system that generated huge revenue for British raj
Economy of India till 1990 India’s economy was influenced from socialist type of economy involving protectism, state intervention in labour and financial market. Mining, machine tools, water, telecommunications, insurance, and electrical plants, among other industries, were effectively nationalized in the mid-1950
India’s Economy today In 1984, government under Rajiv Gandhi started economic reforms .They removed corporate tax and price control. These reforms led to transfer to market based economy While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account.
Why was reform needed? The reforms introduced by Rajiv Gandhi mainly aimed at accelerating growth rate to lower unemployment but it also led to high fiscal deficits and a worsening current account. Collapse of India's main business partner USSR and increase in oil prices led to major balance-of-payment crisis India asked IMF for 1.8 billion us$ loan which demanded reform.
SECTORS There are various sectors on which India's economic growth depends. Agriculture Industry and services Bank and finance Natural resources External trade
Present Economic growth India’s economy has been one of the stars of global economics in recent years, growing 9.2% in 2007 and 9.6% in 2006. Growth had been supported by markets reforms, huge inflows of FDI, rising foreign exchange reserves, both an IT and real estate boom, and a flourishing capital market
Current Position India’s Economy has grown by more than 9% for three years running, and has seen a decade of 7%+ growth. This has reduced poverty by 10%, but with 60% of India’s 1.1 billion population living off agriculture and with droughts and floods increasing, poverty alleviation is still a major challenge.
Failures Like most of the world, however, India is facing testing economic times in 2008. The Reserve Bank of India had set an inflation target of 4%, but by the middle of the year it was running at 11%, the highest level seen for a decade. The rising costs of oil, food and the resources needed for India’s construction boom are all playing a part.
Impact of Crisis The country's banks seem stable compared to their counterparts in richer countries. Bollywood is thriving as the stuff of dreams continues to sell even in hard times.
Impact of financial crisis Most Indians typically spend their entire lives saving for a house even if it takes them 20 years to do that. Seldom do they take loans [just] to finance their lifestyle. That domestic demand doesn't slump
What’s the recent figures? According to the World Trade Statistics of the WTO in 2006, India's total merchandise trade (counting exports and imports) was valued at $294 billion in 2006 and India's services trade inclusive of export and import was $143 billion
Future Of Indian Economy In the revised 2007 figures, based on increased and sustaining growth, more inflows into foreign direct investment, Goldman Sachs predicts that "from 2007 to 2020, India’s GDP per capita in US$ terms will quadruple", and that the Indian economy will surpass the United States (in US$) by 2043.
Conclusion Being a citizen of a emerging super power we need to lower unemployment, corruption and economic disparities. There are yet many challenges to face, we need to get ahead in HDI as we are lacking much behind. Other aspect such as population control, Black money should also be controlled