Indian Economy 21May2010


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Indian Economy 21May2010

  1. 1. Indian Economy Presented to the Delegation from Chinese University of Hong Kong May 21, 2010
  2. 2. India
  3. 3. India - Trends <ul><li>High growth from 2003 was driven by structural factors. </li></ul><ul><li>The growth was supported by all round improvement in productivity </li></ul><ul><li>Favourable demographics </li></ul><ul><li>Increasing urbanisation </li></ul><ul><li>Increasing FDI </li></ul><ul><li>Influence on the world Economy is growing </li></ul><ul><li>Multinational companies are emerging from India </li></ul><ul><li>Stock Market has become very robust </li></ul><ul><li>Many sources are available for funding projects </li></ul>
  4. 4. Indian Economy
  5. 5. Industrial Production
  6. 6. Banks Performance
  7. 7. Interest Rates
  8. 8. Foreign Trade
  9. 9. Forex Reserves
  10. 10. Exchange Rate
  11. 11. Future <ul><li>It is possible to achieve an economic growth of more than 10% a year . </li></ul><ul><li>There are sectors promising a growth of more than 20% a year like Financial services, Software, Telecom , Tourism, Air Transportation, Logistics,etc. </li></ul><ul><li>There are sectors which can grow more than 15% a year. The sectors like Construction, Textiles and a few other services. </li></ul><ul><li>The areas which can grow fast include Auto,Auto components, Retail and Rural development. </li></ul>
  12. 12. What Mckinsey says <ul><li>The Growth will be 7.3% from 2005 to 2025 and the size of the economy will grow to $ 1.76 trillion.The Growth between 1985 to 2005 was at 65. </li></ul><ul><li>Urban average household income will rise by 5.8% and all India by 5.3%. </li></ul><ul><li>Average Household income will rise from Rs.115,000 to Rs.320,000. </li></ul><ul><li>The urbanisation rate would grow from 29% to 37%. </li></ul><ul><li>Consumer market will grow from $ 370 bn to $ 1.5 trillion </li></ul><ul><li>The growth will be mainly driven by increase in income levels. </li></ul><ul><li>Urban India will account for 2/3rds of the growth </li></ul><ul><li>India will become the fifth largest consumer market by 2025 with a growth rate of 7.3%. Today it ranks 12 th in the world. ( US, Japan, China and UK will be ahead of India ) </li></ul><ul><li>Food will remain the largest consumption category whereas the communication would be the fastest </li></ul>
  13. 13. Share of Wallet
  14. 14. Possible threats to growth <ul><li>Rupee Appreciation / Depreciation </li></ul><ul><li>Increasing oil price </li></ul><ul><li>Low level of FDI </li></ul><ul><li>High Current Account Deficit </li></ul><ul><li>High Inflation </li></ul><ul><li>Lower capacity utilisation of assets </li></ul><ul><li>Possible erosion in international competitiveness </li></ul>
  15. 15. Basic strategy for growth <ul><li>India has the competitive advantage in Services. Services could be main driver for growth. </li></ul><ul><li>Export growth could be another plank for providing momentum. </li></ul><ul><li>The growth in Services will generate additional demand for Industrial goods and specific growth strategies for individual sectors would facilitate the process. </li></ul><ul><li>In Agriculture, improving the productivity in farm and after farm activities would result in additional value added. </li></ul>
  16. 16. Growth drivers <ul><ul><li>Increasing the productivity </li></ul></ul><ul><ul><li>E governance </li></ul></ul><ul><ul><li>More Reliable Statistics </li></ul></ul><ul><ul><li>Giving more thrust to sectors growing at more than 10% a year </li></ul></ul><ul><ul><li>Encourage sectors growing at less than 10% a year. </li></ul></ul><ul><ul><li>Electronification of Transactions </li></ul></ul><ul><ul><li>Leveraging the non performing assets ( Gold , Land Banks, Idle Cash) </li></ul></ul>
  17. 17. Thank You