2. CONVENTIONAL ANALYSIS
GDP
 Lowest GDP growth in the decade
Macro-economic issues that overshadowed
moderate inflation and stock market recovery
during the year
• High Fiscal Deficit
• Low Savings Rate
• Rupee Depreciation
• Low Export
 Fiscal deficit close to 5.3% of GDP (2012-13) and Fiscal
projected 4.8% (2013-14 ), 3% (2016-17) Deficit
 Fiscal consolidation requires widening Tax base,
Cut Excess Expenses etc
 No Direct Tax Code, 10% Surcharge on Richest
 No High Profile Accouchements

3. CONVENTIONAL ANALYSIS
 Moderate Inflation rate at 7.6% compared to 9% Inflation
in 2010-11-12
 Monetary policies:
 Industry pressure is to cut the rates to
increase demand however Cash reserve ratio
is reduced to maintain liquidity
 Inflation has no much effect of Repo Rate
increase
Trade Deficit
 Jan 2013 outlook by International Monetary Fund is
2.8% (2012) vs. 5.9% (2011)
 Less exports compared to imports due to low global
demand
 Trade Deficit increased further: 7.4% of GDP (2010-
11), 10.2% (2011-12), 10.8% (2012-13)
 Inelastic import growth in petroleum, oil accounts to
35% of total imports offsetting otherwise low
imports
 Proposals to increase FII inflows to counter deficit

4. SECTORAL COMPARISON ACROSS THE WORLD
 India Fact Sheet:
 Agriculture sector is the base. However growth rate is reducing sharply although the employment remains highest
 Services growth is moderately reduced and Industry growth rate is sharply reduced
 % of GDP and Employment in developed countries are in good agreement
Sector % of Employment Growth rate Growth rate Growth rate
GDP % 2010-11 % 2011-12 % 2012-13
Agriculture 14 50 7.9 3.6 1.8
Industry (manufacturing) 19 17 9.7 2.7 1.9
Services 58 30 9.8 7.9 6.5
Sector % of GDP (2010) Employment (2010)
China USA UK China (2008) USA UK
Agriculture 10 1.2 0.7 39.6 1.6 1.2
Industry 46.6 20 21.6 27.2 16.7 19.1
Services 43.3 78.8 77.7 33.2 81.2 78.9
Source: World bank data

5. COMPARISON ACROSS THE WORLD
Criteria India China USA UK
Healthcare 2010 to 2013 (% Spend of GDP)
Central Govt Expenditure 1.98 - 1.9 - 2.06* 2.7 8.5 8.0
Per head spend by Govt ($) 39 203 4437 2919
Doctors per 10K population 6.5 14.15 24.2 27.43
Education 4.56 – 4.38 – 4.52 No data 7 7
Social Welfare and Nutrition 1.01 – 1.19 – 1.25
Water Supply 2.35 – 1.93 – 2.08
Aid Effectiveness - % Access to 34 64 100 100
Sanitation Facilities
Electricity Access (2009) 66.3 99.4 100 100
Per Capita Income 17.5K – 20.5K – 23.3K
13.4% – 17.1% – 13.7%
Urban Population (% of total) 31 51 82 80
Employment Rate % 1.9 (09-10) 1.0 (10-11)
* This is much lower than developed countries and lowest in BRICS group
** All numbers exclude corruption seepage
Source: World bank data

6. Below poverty line
GUJARAT – THE “VIBRANT STATE”
 “All round” development vs. Reality
 Above all,
Environment issue
is neglected
 Central Pollution
Control Board
(CPCB) announced
that out of 88
most polluted
industrial areas, 8
are in Gujarat

7. WILL INDIA BE A SUPERPOWER BY 2025?
 Conventional analysis focuses only on GDP growth and fiscal analysis while government expenditure is
needed more on public health, education, water, infrastructure, employment and meeting
fundamental needs etc.
 Politicians are smart enough to paint a picture “suitable” to their agenda e.g. Gujarat is being
projected as a “vibrant state” while the official survey shows how it’s poorly ranked when compared
against other states of India
 International Example: China– GDP Expected at 7.5% this year
http://www.stasiareport.com/the-big-story/asia-report/china/story/boost-social-welfare-china-budget-
20130306 (6th March 2013)
Described as “Crucial Stage of Reform - government will raise its fiscal deficit by 50 per cent this year to
1.2 trillion yuan ($240 billion) to increase funding for health care, social security and other items”
This move is to ensure that future growth is fairer and more consumption-driven, expanding domestic
demand as a long term strategy for economic development

8. WILL INDIA BE A SUPERPOWER BY 2025?
2050+
2025??
2013
 India becoming a “superpower” seems like a long way to go!!
 Growth measured by GDP is probably not the best way
 Unless the growth *trickles down* into the lowermost parts
of the society, GDP has virtually no meaning.

9. THANK YOU