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lecture 6SWOT of Iindian economy (1).pptx
- 1. Indian Economy Business EnviornmentPre and post 1991 Lecture 6
- 2. PRE 1991 • Nehrusoviet style policies :Socialism • Closed Economy • License Raj in India • Import subsitution • Corruption • Agriculture sector share in GDP was around 50% POST 1991 • Mixed Economy • Open Economy • Industrial de regulation • Export promotion • Policy changes like demonization • Agriculture sector share in GDP is between 16-18 percent
- 3. • Low growthrate • MRTP 1969 • Business regulated • High growth rate • Competition Act 2002 • Ease of doing business
- 4. SWOT analysis ofIndian Economy
- 5. Strengths • Second largestpopulation :It has 17.74 % of the total population of the world. Dec 26, 2019 • 3rd largest by ppp • English speaking population • Skilled manpower: reservoir of engineers • Huge pool of labour resources • Growing middle class • Growth of service sector • Agriculture provides livelihood to 50% of population • Inflow of FDI • Doing business in India ranking improved 63rd in 2020
- 6. Global Innovation Index2019 • The GII rankings are published annually by Cornell University, INSEAD and the UN World Intellectual Property Organisation (WIPO) and GII Knowledge Partners • India improved its ranking in the global innovation index by five places to 52nd in 2019 from 57th position last year. • India's consistent improvement in ranking since 2015 is largely a result of our focus on improving innovation system in the country
- 7. Weakness • Corruption • Redtape and burearcacy • Corruption Perception Index: Transparency International has launched this index on January 23, 2020, based on data collected in 2019. • Transparency International released the report of this index during the annual meeting of the World Economic Forum in Davos. Denmark and New Zealand topped the index as they are the most honest countries.
- 8. Top Countries inthe Corruption Perception Index Rank Country Score 1 Denmark, New Zealand 87 3 Finland 86 4 Singapore, Sweden, Switzerland 85 7 Norway 84 8 Netherlands 82 9 Germany 80 9 Luxemburg 80 11 Iceland 78 12 Australia, Austria, Canada, UK 77
- 9. INDIA RANKING: CorruptionPerception Index 2019 • India is in the 80th position while this rank is also shared by Benin, China, Morocco, and Ghana. • India’s neighboring country Pakistan ranked 120 on the list. It shows more corruption in Pakistan. • A total of 180 countries have been placed in public sector corruption cases in this index. • The bottom countries are Syria, South Sudan and Somalia with scores 13, 12 and 9 respectively.
- 10. Weaknesses • Poverty • Unemployment •Inequality • Land acquisition is a problem • Growing NPAs
- 11. Opportunities • Demographic dividend: young population • Investment caps in sectors increased which increased flow of FDI • Forex reserves have grown to $360 billion by December 2016. • Increase consumption and ppp: MNCs Sales will increase • Recent reforms • Successful demonetization is likely to yield long term benefits of reducing corruption, increasing household saving and widen the tax base. • Passing of GST act will further increase the competitiveness of goods and services • Growing tourism • Huge diaspora • India developing relationship with countries: Donald trump visit to India • After BREXIT, India has opportunity of renegotiating free trade agreements with UK and Europe for the benefit of India.
- 12. Threats • Recession • Oilprices • Terrorism • Geo political tensions • Growing import bill • High tarrif • Exchange rate • BOP deficit • Manufacturing competition from china • Protectionism • Covid 19
- 13. Rising protectionism: tradewars • Protectionism is trying to use restrictions such as tariffs to boost your country's industry, and shield it from foreign competition. • In May 2018, the president announced a 25% tariff on all steel imports, and 10% on aluminium. • The Trump administration claims the US relies too much on other countries for its metals, • US President Donald Trump has shaken the foundations of global trade, slapping steep tariffs on billions of dollars' worth of goods from the EU, Canada, Mexico and China. • He's imposed a 10% levy on $200bn (£150bn) worth of Chinese products so far. In May, he announced plans to impose a 25% tariff on $325bn of other Chinese goods. • Mr Trump said the $100bn gained from the tariffs will be used to buy US agricultural products, which will then be sent to "poor and starving countries" for "humanitarian assistance". • He also wants to cut the trade deficit with China - a country he has accused of unfair trade practices since before he became president.