Download - Presentation on Economy Analysis
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Presented By :
Economy Analysis
Neha Gupta : 6010020816084
Chetan Bansal : 6010020740337
Anurag Kumar : 6010010832293
Pramod Yadav : 6010020715601
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Global Scenario
Considering Indian ScenarioEconomy Outlook
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It is effected by world GDP .
And by world Inflation Trends.
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-4
-2
0
2
4
6
8
2008 2009 2010 (E)
%
Global GDP Scenario
World GDP Advanced Emerging Economies
Due to high flow of FDI &FII in emerging economy.Emerging economy are attractedby advanced economy as vast
opportunity are available inemerging market. i.e.a. Recruiting talent.b. Developing Joint Ventures.c. Deploying talent to the
emerging market.d. Abundance of natural
resources.e. Demand has increased.
Source: CYGNUSRESEARCH
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-2
0
2
4
6
8
10
2008m1
2008m3
2008m5
2008m7
2008m9
2008m11
2009m1
2009m3
2009m5
2009m7
2009m9
2009m11
2010m1
2010m3
2010m5
%
World inflation trend
World Advanced economies Emerging economies
Inflation infuses liquidityin the market & will help ingrowth.Emerging economies
taking precaution.Speculation is not playedin the economies. Sustainable development.
Protecting businessdownfall.
Source: CYGNUS RESEARCH
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I. GDP ( Gross Domestic Product )II. IIP ( Index of Industrial Product )III. TradeIV. InflationV. Monetary & Fiscal Policy
VI. Economy Industry Linkage
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0
1
2
3
4
5
6
7
8
9
10
AMJ08 JAS08 OND08 JFM09 AMJ09 JAS09 OND09 JFM10
%
GDP Growth RateUptrend's in GDP due toimprove in production of
Agriculture, Fishing, mining& manufacturing than as
anticipated.Growth in Infrastructure.Gross Income rose to 7.4%from 6.8%.
Stability in governmentpolicies.Increase in laborproductivity.
Source: CYGNUS RESEARCH
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-4-202468
1012
1416
AMJ08 JAS08 OND08 JFM09 AMJ09 JAS09 OND09 JFM10
%
Components of GDPgrowth
Agriculture Industry Services
Service sector contributionto GDP is major. i.e. 57%.
Service sector was affectedby the global recession.
Drastic growth inIndustries as compared toprevious year due toimprove in production.
Contribution of agro-
sector has declined due toconversion of agro landinto real estate , and Sez .
Cost of Labor.
Agriculture14%
Industry29%
Services57%
Components of GDPJFM2010
Source: CYGNUS RESEARCH
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0
1
2
3
4
5
6
7
8
9
10
%
Core Industries performance Low base effect. Low interest rate. Reduction in taxes.
High growth inproduction of mineral &iron ore.
Growth in textile ,Gems
& Jewel , Engineeringgoods.
WCL disbursed by bank.
Source: CYGNUS RESEARCH
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0
5
10
15
20
25
2007-08 2008-09 2009-10 AMJ 10
%
LOGISTICS SEGMENT GROWTH
Cargo handled at major ports##
Railway revenue earning freight traffic
-10
0
10
20
30
40
50
2007-08 2008-09 2009-10 AMJ 10
%
Logistics- Airlines
Export cargo handled## Int Psr Dom Psr
Increased in duty has slackedgrowth in logistics.Fluctuating in exchange rate. Freight handling by railway hasincreased.
Revenue from tourism hasincreased.
Increase in inter-stategrowth.
Reduction in fares. New players haveentered. New route has beenlaunched. Morning & Evening
flights Source: CYGNUS RESEARCH
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0
1020
30
40
50
60
70
80
90
2007-08 2008-09 2009-10 AMJ 10
%
TELEPHONE SUBSCRIBERS
-30-20-10
01020304050
6070
2007-08 2008-09 2009-10 AMJ 10
%
SALE OF CV
SALE OF CV
Gap between urban & rural area& Sale of CV increase
Cut & Throat competition existdue to a large number of player.Lack of network-depth in ruralregion.
Urban market has saturated.Reduction in tariffs.
Lower interest rate. Due to third party logistics / hub &
spoke model.Due to demand for bulk
transportation.Better Infrastructure.
Source: CYGNUS RESEARCH
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0
2
4
6
8
10
12
14
16
18
20
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
Monthly YOY Growthrate IIP
Increase in IIP has theconsequent effect on GDP as itis rising.
Strong growth of mineral, iron-ore, mining.Infrastructure has developed. Production of steel , Power &
cement has increased. Growth in production oftextile , & engineering goods .
Source: CYGNUS RESEARCH
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0
5
10
15
20
25
Apr-09
May
-09
Jun
-09
Ju
l-09
Aug
-09
Sep
-09
Oct-09
Nov
-09
Dec
-09
Jan
-10
Feb
-10
Mar-10
Apr-10
%
Components of IIP
Electricity mfg Mining
-10.00
0.00
10.00
20.00
30.0040.00
50.00
60.00
70.00
80.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
25.00
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
%
%
Components of IIP on goods
Consumer goods(LHS) Basics(LHS)
Intermediate(LHS) Capital(RHS)
-10
0
10
20
3040
50
60
70
80
-10
-5
0
5
10
15
20
25
Apr-09
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
%
%
IIP Goods wise index
Basic goods(LHS) intermediate goods(LHS)
Rise in the production due to increasein the capital investment.IIP of mining & quarrying witnessedhigher growth.Withdrawal of stimulus package.
Increase in production of capitalgoods.
Source: CYGNUS RESEARCH
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-12000
-10000
-8000
-6000
-4000
-2000
0
US$mn
Monthly trend of Trade balance Low base effect.Due to sustainable increase in therequirement of importable items, toexpand industry product.
Production & export of goodshas not increased in subsequentperiod. Increase in oil price.
Depreciation of rupee. Import of defense equipments &machineries.
Source: CYGNUS RESEARCH
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-30
-20
-10
0
10
20
30
40
50
60
0
5000
10000
15000
20000
25000
%
US$mn
Export trend and Its growth
EXPORTS(LHS)
-40
-20
0
20
40
60
80
0
5000
10000
15000
20000
25000
30000
%
US$m
n
Import trend and its growth
IMPORTS(LHS) Growth rate (RHS)
Low base effect.Low cost of Production.
Increase in productive
capacity.
Decreased in the Excise duty.
Foreign economies are
recovering.
Price of oil has risen
significantly. Depreciation in rupee. Unplanned expenditure. Production capacity hasincreased.
Source: CYGNUS RESEARCH
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Rising globalcommodity prices.
Demand side effect
on the inflation is alsoposing a strong threat.
Lack of dams ,Storage.
Unplannedexpenditure.
Increase in oil prices. Supply side effect.
-2
0
2
4
6
8
10
12
%
MONTHS
WPI INFLATION
Source: CYGNUS RESEARCH
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0
1
2
3
4
5
6
7
8
9
10
26-Apr-08
10-May-08
24-May-08
12-Jun-08
25-Jun-08
5-Jul-08
19-Jul-08
30-Jul-08
30-Aug-08
11-Oct-08
20-Oct-08
25-Oct-08
3-Nov-08
8-Nov-08
8-Dec-08
5-Jan-09
17-Jan-09
4-Mar-09
21-Apr-09
13-Feb-10
27-Feb-10
19-Mar-10
20-Apr-10
24-Apr-10
Trend of CRR , Repo and ReverseRepo
Reverse Repo Rate Repo Rate Cash Reserve Ratio
Excessive flow ofmoney. Balance growth.
Protect economyfrom sudden downfall.To attract moreglobal & local investor.
Rise in the rate i.e.CRR , Repo , ReverseRepo
Source: CYGNUS RESEARCH
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0
500
1,000
1,500
2,000
2,500
3,000
3,5004,000
Apr-
May
Jun-
Jul-09
Aug
Sep
Oct-
Nov
Dec
Jan-
Feb
Mar
Apr-
May
US$Mn
Monthly FDI Trends
0
500
1000
1500
2000
2500
3000
3500
4000
4500
US
$mn
Trend of FII - Equity and Debt
Equity Debt
Shows increase because of strongeconomic growth . Untapped Market.Strong natural resources.There is lack of export opportunities in
other part of world.
Increased rise in No. of IPOsInvestments in Mutual funds .Easy registration form of FII.
Favorable regulatory norms.Widening Fiscal deficit attracts more FIIs incountry.
Source: CYGNUS RESEARCH
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-25.00-20.00-15.00-10.00-5.00
0.005.0010.0015.0020.00
0
50000
100000150000
200000
250000
300000
%
Rs
cr
Components of Tax and growth
Amount (LHS) Growth(RHS)
-250-200
-150
-100
-50
050
100
150
200
250
0
10000
20000
3000040000
50000
60000
70000
April
May
June
July
August
September
October
November
December
January
February
March
%
RsCr
Fiscal Deficit and growth
Fiscal Deficit(LHS) Growth(RHS)
Strong Growth is seen on revenue side in Corporateand income tax.
Corporate tax increased because of the base effect. Income tax shows growth because of rise in
salaries, increase in no. of people under tax net.
Excise duty and Custom duty grows because of cutin duties as a part of stimulus package.
Corp Tax39%
IT20%
Customs13%
ED17%
Service9%
Others2%
Components of Taxes 2009-10
Source: CYGNUS RESEARCH
Fiscal deficit falls due tounplanned expenditures.a. Subsidy
b. Social Serviceemployments .
c. Defensed. Elections
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Types of Linkage These can be
a) Stock Pricesb) Unemploymentc) Personal Income
Linkage IndicatorsI. Repo , Reverse Repo , Bank RateII. CRR (Cash Reserve Ratio)III. SLR ( Statutory liquidity Ratio)
IV. Bank RateV. Business ConfidenceVI. Employment RateVII. Inflation Rate
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7.8
7.9
8
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
Q1 Q2 Q3 Q4
E L
Real GDP Growth
Source: CYGNUS RESEARCH
Presentation give depth idea overeconomic condition of India.Higher growth signifies thesectoral improvement but tradebalance is still negative as we have
not improved our export .Industrial & Corporate sector is
reviewed along with theinvestment climate. Fiscal Policy is eased but tight
monetary policy is executed tocontrol inflation or help to achieve
sustainable growth
Cont
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Domestic economy witnessed growth & GDP hasincreased.
Infrastructure continue to be among the performing sectors.
Increase in operational efficiencies and decrease in inputcosts. Market have experienced a strong rebound. Inflation based on WPI focused on Growth , Fiscal
Deficit,& Capital Outflow. Market slowdown with political instability has led most
players in the market to be cautious and conservative intheir investments.
Economy Outlook
Cont
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Economy is doing well and FIIs , FDI arepromoting growth.
A lot of IPO with vast opportunity are expandingthe market.
Despite of different policy Inflation is risingcontinuously & so price .
Government is liberalizing its policy. Growth of agriculture is falling continuously as
fertile land are used for expansion of industry. Revenue has increased continuously as income
has increased & so tax slab.
Economy Outlook
Cont
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Unplanned expenditure i.e. subsidy , election , sixth paycommission , waiving of loan has adverse impact ongrowth .
Investment opportunity has increased as cut down ofentry loan in mutual fund & more favorable regulatorynorms.
SEZ has increased output of industry .
Economy Outlook
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The exchange rate of Indian Rupee/ US dollar appreciates whenthere is large capital inflows and depreciates when capital inflowsdecreases.
Due to the volatility in Exchange rates of two currenciesspeculation rises and economy gets affected.
RBI should consider controlling the volatility of the currenciesbecause it effects every sector in Indian economy.
India can prove sustainable growth only if the exchange rates
fluctuate minimal .
Cont
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Depreciation of rupee increases the export & vice-versa. To protect domestic industry government depreciate rupees. Volatility effect economic growth and development of the
economy through its effect on investor's confidence and risk
taking ability.
Should RBI control RS/USD volatility ?
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THANK YOU