Business cycle & economy growth in india since

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Business cycle & economy growth in india since

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

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