Indian Business Environment

1. INDIAN
ECONOMY
AND
PLANNING

2. ECONOMY
 Economy refers to the activities related to the
production and distribution of goods and services
in a particular geographic region.

3. Economic sectors
1. Primary sector: Agriculture, forestry, forming,
mining, fishing etc.

4. Economic sectors
 2. secondary sector: Manufacturing
 Ex: automobile, text tile, chemical and engineering,
ship building

5. Economic sectors
3. Tertiary sector: service industry

6. Economic sectors
4. Quaternary sector: Government, culture, libraries,
scientific research, education, IT

7. Economic sectors
5. Quinary Sector: top executives science,
universities, non profit, healthcare, media.

8. Economic system
 “ An economic system consists of those institutions
which a given nation or group of nations has
chosen or accepted as the means through which
their resources are utilized for the satisfaction of
human wants”

9. Characteristics of Economic
System
 National entity
 Institutional
 Interdependence
 Limited resources
 Need satisfaction
 Dynamic

10. Types of economic system
 Capitalism or market economy
 Socialism
 Mixed economy

11. Capitalism
 Capitalism is an economic system in which the
means of production are privately owned and
operated for profit, usually in competitive markets.

12. Features
 Decentralized system
 Authoritarianism to representative democracy
 Free flow of resources
 Based on Demand & Supply Forces
 Monopoly to Competitiveness
 Producer interest to customer power
 Examples United States Canada United
Kingdom Australia Japan Austria Switzerland

13. Socialism
 Socialism is an economic system where the means
of production are owned or controlled by the state.

14. Features
 Social Ownership of means of production
 Existence of public sector
 Production guided by Social Benefits
 Abolition of exploitation of labor
 Ex: China Denmark Finland Netherlands
Canada, north korea

15. Mixed
economy(capitalism+socialism)
 The mixed economy shares features of capitalism
and socialism.
 Its is characterized by the co-existence of public
and private sectors and the overall GOVT
regulation of the economy

16. Features
 Resources are owned both by the government as
well as private individuals. i.e. co-existence of both
public sector and private sector.
 Market forces prevail but are closely monitored by
the government.
 Monopolies may be existing but under close
supervision of the government.
 Examples India Iceland France Cuba
Russia

17. Indian Economy
 The economy of India is a developing mixed
economy.
 It is the world's sixth-largest economy by nominal
GDP.
 the third-largest by purchasing power parity (PPP).
 India has one of the fastest growing service
sectors in the world with an annual growth rate
above 9%. which contributed to 62% of GDP.
 IT industry continues to be the largest private-
sector employer in India

18. Indian Economy

19. Indian Economy
 GDP growth rate: 7.1%
 GDP by major sectors,

20. Characteristics of Indian
economy
(22%)

21. Emerging sectors in Indian
Economy
 Manufacturing sector
 Food processing
 Textiles(27% of export earning)
 Telecommunication
 Healthcare
 Tourism(20 million workers)
 Entertainment(5million workers)
 Gems and Jewellery
 Power sector

22. Causes for backwardness of
Indian Economy
 Growth of population
 Illiteracy
 Unemployment
 Technological backwardness
 Backwardness of agriculture
 Slow and defective
Industrialization
•Unequal distribution of
wealth.
•Unwise economic policy
•Lack of adequate finance
•Lack of marketing facilities
•Lack of basic amenities.
•Terrorism

23. Indian planning
 “Economic planning is essentially a way of
organizing and utilizing resources to maximum
advantage in terms of defined social needs”.

24. Characteristics of Indian
Planning
 Five yearly plans.
 Existence of central planning authority.
 Laying down objectives
 Fixing targets
 Controls
 Systematic and coordinated effort
 Growing public sector
 Effective utilization of resources.

25. Objectives of Indian Planning
 High rate of growth
 Removal of poverty
 Full employment
 Economic self reliance
 Social justice
 Modernization of the economy
 Economic stability

26. Significance of Indian Planning
 Efficient utilization of resources
 Maximization of National Income and Rising
standard of living.
 Market imperfections and price distortions
 Improves employment opportunities.
 Equitable distribution of income
 Price stability
 Larger savings and investment
 Aid to victim of catastrophe.