module 5 1 efm - indian economy

Module 5 - Syllabus

Indian Economic Development:Overview of Indian Economy Recent Changes in Indian Economy Measurement of National Income: Basic Concepts, Components for GDP Measuring of GDP and GNP Problems in measuring National Income Growth Rate Business Circle Features Phases Economic indicators Inflation Types Measurement Kinds of Price indices Primary, Secondary and Teritary Sector in the contribution to the economy SWOT analysis of Indian Economy.

Latest Facts - 2015

1 US Dollar = 65.45 INR as on 01.11.2015.

GDP Rank: 7th (Nominal), 3rd (PPP) Oct 2015.

GDP Growth Rate: 7.3% (2015-16).

GDP per capita (Nominal) $ 1,688 (Oct 2015).

GDP per capita (PPP) $ 6,209 - 121st in world.

GDP Contribution: Agriculture 17% (2013-14)

GDP Contribution: Industry 26% (2013-14)

GDP Contribution: Service 57% (2013-14)

Latest Facts - 2015

Population below poverty: 12.4%.

Labor Force by Occupation: Agriculture 49%. (as on 2012)

Labor Force by Occupation: Industry 20%. (as on 2012)

Labor Force by Occupation: Service 31%. (as on 2012).

India is classified as 'Newly Industrialized Economy'.

Latest Facts - 2015

India is one of the G20 Major Economies,

India is a member of BRICS,

India is a developing economy with an average growth rate of 7% for the past 2 decades,

India became the fastest growing economy replacing the Republic of China (2014).

India is the 9th Fastest Growing economy in service sector, since 2001 and contributes 57% of GDP (2012-13).

Latest Facts - 2015

India has large Educated English speaking population to become the major exporter of BPO, KPO and other software services exports (2013-14). (ITES Firms)

India is the 4th largest start up hub in the world with 3,100 technology start ups in 2014-15.

India ranks 2nd in world wide farm output.

India has $600 billion worth retail market in 2015.

India is one of the fastest growing E-Commerce Markets in the world.

Latest Facts - 2015

India major stock exchange Bombay Stock Market ranks 11th in the world. (Feb 2015)

India major stock exchange National Stock Market ranks 12th in the world. (Feb 2015)

India is the member of Common Wealth Nations, South Asian Association for Regional Co-operation, IMF, the World Bank, the World Trade Organization (WTO), the Asian Infrastructure Investment Bank (AIIB), New development BRICS bank, and the United Nations.

Certain Facts with USA

In India, 70% (presently about 58%) of the population are employed in agriculture, while only 3% in USA,

Our per capita income is one-thirteith of USA per capita income,

In 2002, the Purchasing Power Parity (PPP) was one fourteenth of USA.

OVERVIEW OF INDIAN ECONOMY

One of the fastest growing economies in the world.

One of the highest population growth rate in the Globe,

One of the highly diversitied economy,

7th Largest Country,

4th Largest on the Purchasing Power Parity in the World,

There is vast difference between the richest and poorest states (3-4 times of per capita income)


Since 1991, Economic reforms has been initiated for a investment-friendly environment, through a liberalized frame work spinning the whole economy.

Statistical reports 2010 states, half the poor people in the world live in India.

2010 Statistics states, 40% of the working population are under employed.

The per capita consumption of paper is only 2 Kgs, while the per capita expenditure on education is around Rs. 300 Crores. (Poorest Human Capital)


Agriculturally Developed states in the Country, include Punjab, Haryana.

Industrially Developed states in the Country include Maharastra, Gujrath.

Highest per capita income states include Punjab, Haryana, Puducherry.

Lowest Per Capita Income state include Bihar, Odissa States.

India needs vast investments in infrastructure in State and National Highways, Health care, Rail and port and so on.


The GDP of the country remains below 5%. (4.9% in the year 2012-13, and 2013-14 it was 4.5%).

The interim budget for 2014 budget has projected the fiscal deficit for 2014-15 fiscal at 4.1% of GDP or 5.29 Lakh Crore.

Foreign Direct Investment (FDI) has doubled over the years in sectors like Automobiles, Telecommunications, Pharaceuticals and Constructions.


The Net Investment by FII (Foreign Institutional Investments) into Indian Equity Markets since the beginning of 2014 have crossed over Rs. 30,000 Crores, while the same for debt markers also stands near Rs. 29,000 taking the close to Rs. 60,000 Crores.

Trade in 2013-14 grew to 3.98%, while imports dipped to 8.11% during the same period

CHARACTERISTICS OF INDIAN ECONOMY

Underdeveloped Economy,

Mass Poverty and Low Per Capita Income,

Inequalities in Income Distribution,

Predominance of Agriculture,

Underdeveloped Natural Resources and Inadequate Capital Formation.

Demographic Pecularities (Growth of population in 1961-2001 was 2.2%, presently it is 1.7%)


Infrastructural backwardness/ inadequacies,

Dualistic Economy (Mixed Economy),

Unemployment and Underemployment,

Quality of Human Capital,

Rapid Population growth and high dependency ratio,


India is one of the fastest growing economy in the world.

India's population grows at 2.5% per annum (Reduced to 2.14% and presently further to 1.7%) and there is a high dependency ratio. (A clear indication of population control has got initiated)

Structure of Indian Economy

1. Underdeveloped Economy,2. Dualistic Economy (Agriculture and Industry), 3. Mixed Economy (Public and Private),4. Reforms of the economy, (1947 to till date),

Economic Reforms and Economic Development

Economic Reforms:1991 India's Economic Liberalization has moved the country to 'Market Based Economy'.

2008 India has established as one of the fastest growing economy in the world.

Economic Reforms and Economic Development

Economic Reforms can be seen in three heads:

Economic Reforms during Post Independence Period (After 1947 to 1960).

Economic Reforms 1960s and 1980s,

Economic Reforms 1990s to present.(The pre-liberalization period is from 1947 to 1992) and Post Liberalization Period is since 1992)

Economic Reforms during Post Independence Period (After 1947 to 1960).

Focus to make India a self sufficient.

Economic Reforms were focused on Agriculture, Infrastructure, and Defence.

Five year plans were introduced in 1950.

Emphasized on growth of Public and Rural sector.

In mid 1950s, huge scale of nationalization of Industries like Mining, Telecommunications, Electricity was done.

Economic Reforms 1960s and 1980s,

Efforts to make India selfsufficient,

Emphasized on increase of production and exports,

Sucess of huge scale agriculture development was done (Green Revolution, White Revolution),

Improved seeds, fertilizers and new irrigation projects were undertaken,

Our Prime Minister Rajiv Gandhi initiates the first step of liberalization, removing and erasing restrictions in various sectors.

Economic Reforms 1990s to present.

Economic Crisis due to fall of Soviet Union and problems in balance of payments and IMF asked to bailout loan,

Our PM Manmohan Singh initiated the liberalization of economic liberalization reforms,

Foreign Direct Investment (FDI) was encouraged, Public Monopoly was stopped and service sector was developed.

Emphasized on 'Open Market Economic Policies'.


From 1992-93 to 2001-02 (10 years) India average growth rate touched 6% which put India one of the world's fastest growing economy.

World economic Growth was slowed in second half of 1990s, and had some hampered effect.


Heads on Economic Reforms:

1. Savings, Investment and Fiscal Discipline,2. Reforms on Industrial and Trade Policies, (Industrial Policies and Trade Policies),3. Foreign Direct Investments,


4. Agriculture Reforms,5. Infrastructure Developments,6. Financial Sector Reforms,7. Privatization, & 8. Social Sector Development in health and Education.