Factor affecting exchange rate and its impact on Indian Economy

1. Factors affecting
the Indian
economy….

2. Exchange Rate
In finance , an exchange rate is the rate at which one currency will be exchange for another. It is also
regarded as the value of one country’s in relation to another currency. The Indian Rupee is the currency
of India. Our currency rankings show that the most popular India Rupee exchange rate is the USD to INR
rate. The currency symbol is rupees. Below you’ll find Indian Rupee rates and a currency newsletters
with daily rates and analysis.
For Exmple ,
Indian Rupee INV.1.00 INR
1) US DOLLARS 71.14
2) EURO 79.47
3) AUSTRALIAN DOLLER 48.78
4) CANDIAN DOLLER 54.19
5) SINGAPORE DOLLER 52.16
6) SWISS FRANC 72.27
7) MALAYSIAN RINGGIT 16.98
8) JAPANESE YEN 0.65
9) CHINESE YUAN RENMINBI 10.04
10)BRITISH POUND 92.33

3. INFLATION
Inflation rate in India was 3.88% as of 2019 , as per the Indian Ministry of Statistics and Programme
Impplentation. This represents a modest reduction from the previous annual figure of 9.6% for June 2011.
Inflaction rates in India are usually quoted as changes in the Wholesale Price Index (WPI), for all
commodities…
Many developing countries use changes in the consumer price index(CPI) as their central measure of
inflaction. In India , CPI is declared as the new standard for measuring inflaction. CPI numbers are typically
measured monthly, and with a significant lag, making them unsuitable for policy use. India uses changes in
the CPI to measure its rates of inflaction.
Inflation rate from 2010 to 2019
2010 10.53%
2011 9.5%
2012 10%
2013 9.4%
2014 5.8%
2015 4.9%
2016 4.5%
2017 3.6%
2018 2.48%
2019 3.88%

4. Causes of Inflaction
1) Black Money
2)Demand-Pull Effect
3)Exchange Rate
4) National Debt

5. DEFLACTION
Defination – When the overall price level decreases so that inflaction rate
become negative, it is called deflation.It is the opposite of the often-
encountered inflaction.
In economics, deflation is a decrease in the general price level of goods and sevices.Deflaction
occurs when the inflaction rate falls below 0%. Inflaction reduces the value of currency over
time, but deflaction increses to be bought than before with the same amount of currency.
Deflaction is distinct from disinflaction a slow down in the inflaction from disinflaction, a slow
down in the inflaction from disinflaction , a slow-down in the inflaction rate, i.e. when inflaction
declinese to a lower rate but is still positive.
Deflaction usually happens when supply is high when demand is low or when the money supply
decreses contraction created from careless investments or because of a net capital outflow from
economy. It can also occur due to too much competition and too little market concentration.

6. Causes of Deflaction
 1. Structural changes in capital markets
 When different companies selling similar goods or services
compete, there is a tendency to lower prices to have an edge
over the competition.
 2. Increased productivity
 Innovation and technology enable increased production
efficiency which leads to lower prices of goods and services.
Some innovations affect the productivity of certain industries
and impact the entire economy.
 3. Decrease in supply of currency
 The decrease in the supply of currency will decrease the prices
of goods and services to make it affordable to people.

7. GDP
The economy of india is characterized as a developing market economy. It is the world fifth largest
economy by nominal GDP and the third-largest by purchasing power parity. According to the IMF on
a per capital income basis, india ranked 142nd by GDP and 119th by GDP per capital 1991 ,
successive government promoted protectionist economic policies with extensive state intervention
and regulation the end of the cold war and an acute balance of payment crisis in 1991 led of the
adoption of a broad program of economic leberalisation. Since the start of the 21st Century, annual
average GDP growth has been 6% To 7% , and from 201 to 2018 , india was the world’s fastest
growing major economy, surpassing china.
Currency Indian rupee rs 1
Fiscal year 1 April – 31 march
Trade organisations WTO , WCO, WFTU, BRICS, G-20, BIS
AIIB,ADB AND OTHERS
Country group DEVELOPING
LOWER MIDDLE INCOME ECONOMY.

8. POPULATIN
GDP $2.936 TRILLION (NOMINAL; 2019 EST.)
$2.936 TRILLION PPP; 2019 EST.)
GDP RANK 5th (NOMINAL ;2019)
3rd (PPP ; 2019)
GDP GROWTH LESS 6.0% (2019)
GDP PER CAPITA GROWTH $8,378(2019)
GDP PER CAPITA RANK 142nd (NOMINAL ;2018)
119th (PPP; 2018)
GDP BY SECTOR AGRICULTURE : 15.4%
INDUSTRY : 23%
SERVICES : 61.5%
INFLACTION 3.428%(2018)
HUMAN DEVELOPMENT INDEX 0.468IHDI
POPULATION BELOW POVERTY LINE 3.7% IN EXTREME POVERTY (2018)

9. EXPORTS $330 BILLION
EXPORTS GOODS AGRICULTURAL PRODUCTS – 12.8%
FUELS AND MINING – 13.8%
MANUFUCTURES – 70.5%
OTHERS - 2.9%
MAIN EXPORT PARTNERS ARAB LEAGUE – 17.37%
EUROPEAN UNION – 17.34%
UNITED STATES – 15.88%
ASEAN – 11.38%
CHINA – 5.08%
HONG KONG – 3.94%
JAPAN – 1.74%
SOUTH KOREA – 1.43%
OTHER – 26.11%

10. IMPORTS $514 BILLION
(2019)
IMPORTS GOODS AGRICULTURAL – 8.1 %
FUELS AND MINING – 30%
MANUFACTURES – 51.7%
OTHER – 10.2%
MAIN IMPORT PARTNERS ARAB LEAGUE – 19.88%
CHINA – 13.68%
ASEAN – 11.53%
EUROPEAN UNION – 11.35%
UNITED STATES – 6.92%
HONG KONG – 3.50%
SOUTH KOREA – 3.26%
JAPAN – 2.48%
OTHER – 27.4%
FDI STOCK INWARD
$386.35 BILLION
OUTWARD
$166.19 BILLION (2018)
CURRENT ACCOUNT -$57.2 BILLION (2019)
GROSS EXTERNA DEBT $543.0 BILLION (2019)
NET INTERNATIONAL INVESTMENT
POSITION
LESS $436.4 BILLION (2019)

12. CORRUPTION
 Corruption has been a pervasive problem in India.A
2005 study by Transparency International (TI) found
that more than half of those surveyed had first-hand
experience of paying a bribe or peddling influence to
get a job done in a public office in the previous year. A
follow-up study in 2008 found this rate to be 40
percent. In 2011, TI ranked India at 95th place
amongst 183 countries in perceived levels of public
sector corruption.By 2016, India saw a reduction in
corruption and its ranking improved to 79th place.

14. POVERTY
 Poverty rates in India's poorest states are three to four times higher
than those in the more advanced states. While India's average annual
per capita income was $1,410 in 2011 – placing it among the poorest
of the world's middle-income countries – it was just $436 in Uttar
Pradesh (which has more people than Brazil) and only $294 in Bihar,
one of India's poorest states.A critical problem facing India's economy
is the sharp and growing regional variations among India's different
states and territories in terms of poverty, availability of infrastructure
and socio-economic development.Six low-income states – Assam,
Chhattisgarh, Nagaland, Madhya Pradesh, Odisha and Uttar Pradesh –
are home to more than one-third of India's population. Severe
disparities exist among states in terms of income, literacy rates, life
expectancy and living conditions.

16. UNEMPLOYMENT
 Unemployment in India statistics has traditionally been collected,
compiled and disseminated once every five years by the Ministry of
Labour and Employment (MLE), primarily from sample studies
conducted by the National Sample Survey Office. Other than these
5-year sample studies, India has – except since 2016 – never
routinely collected monthly, quarterly or yearly nationwide
employment and unemployment statistics. In 2016, Centre for
Monitoring Indian Economy – a non-government entity based in
Mumbai, started sampling and publishing monthly unemployment in
India statistics.
 Unemployment is a major social issue in India. As of September
2018, according to the Indian government, India had 31 million
jobless people. The numbers are widely disputed.

18. THANKING
YOU