Indian Economic Condition

7/28/2019 Indian Economic Condition

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India and the global Economy

Presented by: BALAJI

BHARATHCHETAN

PRAVEEN

RAMYA


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Economy of India

The economy of India is the tenth-largest in

the world by nominal GDP and the third-

largest by purchasing power parity (PPP).

India is the 19th-largest exporter and the

10th-largest importer in the world.

Economic growth rate slowed to around ~5.5%

for the 201213 fiscal year compared with

6.2% in the previous fiscal.


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India GDP Facts

For financial year 2012-13 the governmentsprojection for growth is 5.7-5.9 per cent

FM Expects Indias GDP to grow at 6 per cent

in 2013-14. India targets 8 per cent average growth rate

over a period of five years ( 2012-17).

Indias Foreign exchange reserves increased byUS$ 39.6 million to touch US$ 296.57 billionfor the week ended December 28, 2012.


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Graphical representation of GDP


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Pre-colonial period (up to 1773)

The citizens of the Indus Valley civilization, a

permanent settlement that flourished between 2800BC and 1800 BC, practiced agriculture, domesticatedanimals, used uniform weights and measures, madetools and weapons, and traded with other cities

StreetsDrainage system

Water supply

Urban planning

Sanitation Maritime trade was carried out extensively

between South India and southeast and West Asiafrom early times until around the fourteenth century

AD.


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Colonial period

(17731947)

Company rule in India brought a major changein the taxation and agricultural policies

Establishment of Railways & Telegraphs

The 1872 census revealed that 91.3% of thepopulation of the region constituting present-

day India resided in villages

An aerial view of Calcutta Port taken in 1945.

Calcutta, which was the economic hub

of British India, saw increased industrialactivity during World War II.


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Pre-liberalization period (19471991)

Indian economic policy after independence was influenced bythe colonial experience, which was seen by Indian leaders asexploitative, and by those leaders' exposure to British socialdemocracy as well as the progress achieved by theplanned economy of the Soviet Union

Strong emphasis was given on

Import substitution

Industrializationcottage industries

Public sector

Business regulation

Central planning


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Liberalization Why did it start???

In 1991, India Faced a Balance of PaymentsCrisis.

It had to Pledge its Gold to Foreign Countries.

It was a deal with The IMF.

Then PM of India, P V Narsimha Rao Knew thatIt was time for Some Bold Decision.


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History of Liberalization in India

July 1991,India has taken a series of measures to structure theeconomy and improve the BOP

The new economic policy introduced changes in several areas.

The policy have salient feature which are-:

1) Liberalization

2) Extending Privatization

3) Globalization of the economy

Which are known as LPG. (liberalization privatization globalization)


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Economic Liberalization in India

It means the process of opening up of the Indian economy to trade andinvestment with the rest of the world.

It means that opening the Door for doing Business to all over the world.

Till 1991 India had a import protection policy wherein trade with the restof the world was limited to exports.

Foreign investment was very difficult to come into India due to abureaucratic framework.

After the start of the economic liberalization, India started getting hugecapital inflows and it has emerged as the 2nd fastest growing country in theworld.


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The Policies of Liberalization

Included the Following

Opening the Gate for International Trade and Investment.

Deregulation. (The removal of government controls from

an industry or sector, to allow for a free and efficient marketplace).

Initiation of Privatization.

Tax Reforms.

Inflation Controlling Measure.


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Impact of Liberalization on Indian

Economy Increase in Employment.

Arrival of New Technology orDevelopment of Technology.

Development ofInfrastructure.

Identity at World Level.

Increase Our Currency Value(INR).

GDP Growth.

Increase Consumption and

Adaptation of New Lifestyle.

Increment of Competition.

Increment in ForeignInvestor.


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Advantages of liberalization

Development of economy without capital investment.

Increase the foreign investment.

Increase the foreign exchange reserve.

Increase in consumption and Control over price.

Reduction in dependence on external commercialborrowings


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Disadvantages of Liberalization

Loss to domestic units.

Increase dependence on foreign nations.


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Privatization

Privatization means transfer of ownership and/or management

of an enterprise from the public sector to the private sector .

Privatization is opening up of an industry that has beenreserved for public sector to the private sector.

Privatization means replacing government monopolies with

the competitive pressures of the marketplace to encourageefficiency, quality and innovation in the delivery of goods and

services.


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Globalization

It Means that opening up of the economy for foreign direct

investment by liberalizing the rules and regulations and by

creating favorable socio-economic and political climate for

global business.

Opening and planning to expand business throughout the

world.

Buying and selling goods and services from/to any countries

in the world.


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MACROECONOMIC OUTLOOK


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Growth Forecasts for Selected

Countries/Country Groups (%)

Turkey Euro Area US Brazil Russia India China

2013 3.4 -0.3 1.9 3.0 3.4 5.7 8.0

2014 3.7 1.1 3.0 4.0 3.8 6.2 8.2

2013 4.1 -0.1 2.0 4.0 3.8 5.9 8.52014 5.2 1.3 2.8 4.1 4.1 7.0 8.9

2013 4.0 0.7 2.4 4.2 4.2 6.9 8.1

2014 5.0 1.4 2.8 3.9 4.0 7.1 8.4

2013 3.2 -0.3 2.1 3.3 4.4 6.7 8.3

2014 5.4 0.9 2.3 4.5 4.4 7.2 8.5

IMF

OECD

WB

UN

Growth Forecasts for Selected Countries/Country Groups (%)

Source: IMF, OECD, UN, WB

Gl b l i tl k


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Global economic outlook

Prospects for the world economy in

2012-2013

The world economy is on the brink of another

recession

The problems are multiple and interconnected

Policy paralysis has become a major stumbling

block


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Faltering growth

Global output growth is slowing and risks for a

double-dip recession have heightened

Developing country growth remains strong,

but is decelerating because of the economic

problems in developed countries

K ti f th U it d


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Key assumptions for the UnitedNations

baseline forecast for 2012 and 2013 The forecast presented in the text is based on estimates

calculated using the United Nations World Economic

Forecasting Model (WEFM) and is informed by country-

specific economic outlooks provided by participants in Project

LINK, a network of institutions and researchers supported by

the Department of Economic and Social Affairs of the United

Nations.

Indian Economic Condition

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