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India 
A growing economy By 
Koushik Dutta
India: rising GDP growth 
% average annual GDP growth 
1900 – 1950 1.0 
1950 – 1980 3.5 
1980 – 2002 6.0 
2002 – 2006 8.0 
• What do these figures tell you about the Indian economy?
Population growth 
% average annual growth 
1901 – 1950 1.0 
1951 – 1980 2.2 
1981 – 1990 2.1 
1991 – 2000 1.8 
2001 – 2010 1.5 
• What do these figures tell you about population 
growth in India?
Adult literacy rates 
% 
1950 17 
1990 52 
2000 65 
2010 (projected) 80 
• What do these figures tell you about changes to education 
in India?
People categorised as middle 
class 
% of population Million People 
1980 8 65 
2000 22 220 
2010 (projected) 32 368 
• What do these figures tell you about the service 
sector economic growth in India?
Poverty statistics 
Estimates of those in poverty 
1980 46% 
2000 26% 
2010 (projected) 16% 
• 1% of the people have been crossing poverty line each year for 20 
years. Equals 200 million people. 
• What do these figures tell you about anti-poverty strategies 
in India?
Productivity is rising 
30% to 40% of GDP growth is due to 
rising productivity
India is now the 4th largest 
economy 
It will overtake Japan between 2012 and 2014 
to become the 3rd largest world economy
DRIVERS OF GROWTH 
India East and S.E. Asia 
Domestic Exports 
Services Manufacturing 
Consumption Investment 
High tech, capital Low tech, labour 
intensive industry intensive 
industry
What is the implication of the Indian 
model? 
• Has India skipped the industrial 
revolution? 
• How does India take its people 
from farms to cities?
Rise of globally competitive 
Indian companies: 
Reliance, Jet Airways, Infosys, Wipro, 
Ranbaxy, Bharat Forge, Tata Motors, 
TCS, Bharati, ICICI and HDFC Banks
Demographic trend points to sharp increases in input factors 
54% 
46% 
25+ 
yrs 
0-25 
yrs 
Demographic Split 
1.1 bn 
420 
1.5 bn 
800 
1,600 
1,400 
1,200 
1,000 
800 
600 
400 
200 
0 
2005 2025 
Labor 
Force 
Labor Force will double in the next 20 years
Demographic trend points to sharp increases in input factors 
Age Dependency 
72% 
<50 % 45% 
62% 
80% 
60% 
40% 
20% 
0% 
1980's 2002 2025 China 2002 
17% 
42% 
35+% 
24% 
50% 
40% 
30% 
20% 
10% 
0% 
1980's 2002 2025 China 2002 
Savings Rate 
Higher savings and investment rate will translate into higher GDP growth
“By 2010 India will have world’s 
largest number of English speakers” 
“When 300 million Indians speak a 
word in a certain way, that 
will be the way to speak it.” 
-Prof. David Crystal, Cambridge Encyclopedia of the English Language

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Indian Economy & growth trends

  • 1. India A growing economy By Koushik Dutta
  • 2. India: rising GDP growth % average annual GDP growth 1900 – 1950 1.0 1950 – 1980 3.5 1980 – 2002 6.0 2002 – 2006 8.0 • What do these figures tell you about the Indian economy?
  • 3. Population growth % average annual growth 1901 – 1950 1.0 1951 – 1980 2.2 1981 – 1990 2.1 1991 – 2000 1.8 2001 – 2010 1.5 • What do these figures tell you about population growth in India?
  • 4. Adult literacy rates % 1950 17 1990 52 2000 65 2010 (projected) 80 • What do these figures tell you about changes to education in India?
  • 5. People categorised as middle class % of population Million People 1980 8 65 2000 22 220 2010 (projected) 32 368 • What do these figures tell you about the service sector economic growth in India?
  • 6. Poverty statistics Estimates of those in poverty 1980 46% 2000 26% 2010 (projected) 16% • 1% of the people have been crossing poverty line each year for 20 years. Equals 200 million people. • What do these figures tell you about anti-poverty strategies in India?
  • 7. Productivity is rising 30% to 40% of GDP growth is due to rising productivity
  • 8. India is now the 4th largest economy It will overtake Japan between 2012 and 2014 to become the 3rd largest world economy
  • 9. DRIVERS OF GROWTH India East and S.E. Asia Domestic Exports Services Manufacturing Consumption Investment High tech, capital Low tech, labour intensive industry intensive industry
  • 10. What is the implication of the Indian model? • Has India skipped the industrial revolution? • How does India take its people from farms to cities?
  • 11. Rise of globally competitive Indian companies: Reliance, Jet Airways, Infosys, Wipro, Ranbaxy, Bharat Forge, Tata Motors, TCS, Bharati, ICICI and HDFC Banks
  • 12. Demographic trend points to sharp increases in input factors 54% 46% 25+ yrs 0-25 yrs Demographic Split 1.1 bn 420 1.5 bn 800 1,600 1,400 1,200 1,000 800 600 400 200 0 2005 2025 Labor Force Labor Force will double in the next 20 years
  • 13. Demographic trend points to sharp increases in input factors Age Dependency 72% <50 % 45% 62% 80% 60% 40% 20% 0% 1980's 2002 2025 China 2002 17% 42% 35+% 24% 50% 40% 30% 20% 10% 0% 1980's 2002 2025 China 2002 Savings Rate Higher savings and investment rate will translate into higher GDP growth
  • 14. “By 2010 India will have world’s largest number of English speakers” “When 300 million Indians speak a word in a certain way, that will be the way to speak it.” -Prof. David Crystal, Cambridge Encyclopedia of the English Language