Economy of india


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Economy of india

  1. 1. GROUP- 3B
  2. 2.  India is the 11th largest in the world by GDP and the 3rd largest by PPP Member of G- 20 and BRICS By considering per capita income- 129th in the world (out of 196)- thus lower-middle income economy. GDP- $1.676 trillion (2011) GDP growth 6.5% (FY 2012) GDP per capita $1,389 ( 2011) GDP by sector(2011) ◦ agriculture: 18.1%, ◦ industry: 26.3%-12th in terms of output ◦ services: 55.6% Inflation (CPI) 7.55% (May 2012) Income- grew by 14.3% to reach Rs.60,972 during 2011– 12.
  3. 3.  Pre Colonial: ( since Indus Valley Civilization to 1700 AD ) ◦ had very good trade relations with other parts of world, ◦ evident from the coins of various civilizations found at the site of Indus valley. Colonial: ( 1700 AD to 1947) ◦ Company rule in India brought a major change in the taxation and agricultural policies ◦ Indias share of world income collapsed from 22.6% in 1700, almost equal to Europes share of 23.3% at that time, to as low as 3.8% in 1952.
  4. 4.  Pre-liberalisation period (1947–1991) ◦ the process of rebuilding the economy started ◦ Five year plans started in 1952 by Jawaharlal Nehru ◦ Trade liberalization, financial liberalization, tax reforms and opening up to foreign investments were some of the important steps, which helped Indian economy to gain momentum. Post-liberalisation period (since 1991) ◦ Prime Minister Narasimha Rao, along with his finance minister Manmohan Singh, initiated the economic liberalisation of 1991 ◦ reduced tariffs and interest rates and ended many public monopolies, allowing automatic approval of foreign direct investment in many sectors.
  5. 5.  MANUFACTURING Economic reforms 1991- removed import restrictions-brought in foreign competition- threat of cheaper Chinese imports- privatization of certain public sector industries-liberalized FDI -improved infrastructure. Textile manufacturing – 2nd largest source of employment-1st agriculture Indian economy - investment slowdown, growth momentum is weakening. Manufacturing industry growth rate down to 5.0 % from 5.6 %. Export growth- moderate due to slowing growth in the country’s export destinations, notably Europe.
  6. 6.  13th in services output- Largest share in GDP-62%- expected GPD growth rate has been lowered by CRISIL to 6.5% due to the sluggish growth in IT/ITES as a result of slowing export demand from the Eurozone, and slower than earlier anticipated growth of the hotels, trade and transport sector due to moderation in private consumption growth.
  7. 7.  Indian Textile sector grew by more than 5% in the last two fiscal years and is projected to grow at 16% by 2012. second largest employer of Indians after agriculture, it currently employs 88 million people and is expected to generate another 17 million jobs by 2012. third largest of textile to both USA and Europe and exports grow by 24% in last fiscal year. They are likely to grow by 25% in the next 5 years increasing the Indian Textile Industry’s share in world textile market from 3% to 7%.
  8. 8.  needs to grow at a CAGR of 15% over the next five years to support the growing requirements of virtually every other sector of the Indian Economy. will require US$ 1.7 trillion investment in the next 10-years expects to invest about USD 500 billion in infrastructure, mainly in power, telecommunication, roads, railways and oil pipelines, in the five years
  9. 9.  India have: - 12 Major Ports - Fifth largest electricity generation capacity in the world - 454 airports and airstrips in India - Fourth largest rail network in the world
  10. 10.  the total literacy rate 74.04% female literacy rate is 65.46 % male literacy rate is 82.14% Higher education enrollment ratio-11%US - 83% A study by the National Assessment and Accreditation Council: 90 per cent of the colleges and 70 per cent of the universities were of poor quality
  11. 11.  accounts for 14-15% of its GDP one of the top five retail markets in the world by economic value. one of the fastest growing retail market in the world, with 1.2 billion people 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores IKEA, Apple, Nike- single brand stores Walmart, Carrefour, Tesco- multi brand retail stores
  12. 12.  Tourism - is relatively undeveloped, but a high growth sector. contributes 6.23% to the national GDP majority of foreign tourists come from USA and UK. Indias rich history and its cultural and geographical diversity make its international tourism appeal large and diverse. heritage and cultural tourism along with medical, business and sports tourism. fastest growing medical tourism sectors
  13. 13.  One of the strong sectors of Indian economy (18% of GDP) 58 % population of India depends on Agriculture largest producer of coconuts, mangoes, bananas, cashew nuts, pulses, ginger Second largest producer of rice, wheat, cotton, fruits and vegetables Contributes to 1/6th of the export earnings Green Revolution- breakthrough Exports- coffee, spices
  14. 14.  State Bank of India-1806 1990’s reform- entry of many foreign banks IT revolutionised- so came online banking The public sector banks hold s 75% of total assets of the banking industry, with the private banks holding- 18.2% ,foreign banks - 6.5% mandatory for banks to provide 40% of their net credit to priority sectors like agriculture, small-scale industry, retail trade, small businesses
  15. 15. Impact of New Banking Policies Encouraging mergers reducing government interference increasing profitability and competitiveness foreign players
  16. 16.  Rating agency S&P degrade India, as result foreign players withdraw their investments. This leads to a decrease in the forex reserve. ◦ the banking industry in india is in a good position, which makes good profit from its operations. the value of rupee depreciating when compared to the us dollars. As now INR/1USD= 55.339. - Sensex crossed 17000 mark recently after a long time. Nifty crossed 5200 mark. -current inflation rate in india is at 7.25%. The fight against inflation is done by central banks which control the money supply by increasing or decreasing short term interest rates. current bank rate is 9%, repo rate is 8% and reverse repo rate is 7%. CRR=4.75% and SLR is 24% non banking financial institutions also plays an important role .
  17. 17.  Some of its regional and bilateral trade agreements are ◦ India-Sri Lanka Free Trade Agreement, ◦ Trade Agreements with Bangladesh, Bhutan, Sri Lanka, Maldives, China, and South Korea. ◦ India-Nepal Trade Treaty, ◦ Comprehensive Economic Cooperation Agreement (CECA) with Singapore. ◦ Framework Agreements with the Association of Southeast Asian Nations (ASEAN), Thailand and Chile. ◦ Preferential Trade Agreements with Afghanistan, Chile, and Mercosur (the latter is a trading zone between Brazil, Argentina, Uruguay, and Paraguay). India- pushing for a more liberal global trade regime, especially in services.
  18. 18.  Agricultural and allied sectors -52.1%. Avenues for employment- IT and travel and tourism sectors, which have high annual growth rates of above 9%. Unemployment in India is characterised by chronic (disguised) unemployment. 11th five-year plan identified the need for - congenial environment for employment generation, by reducing the number of permissions and other bureaucratic clearances required. Inequalities and inadequacies in the education system have been identified as an obstacle preventing the benefits of increased employment opportunities from reaching all sectors of society.
  19. 19. THANK YOU