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Transcript of Indian Economy
Indian Economy And its Place in the
World
Indian Economy And its Place in the
World
A Presentation by Group 9
Asha NachiKritika PrabhakarNitesh KumarRaunaq ChawlaSeshu PinnamineniVijay Pal Singh
A Presentation by Group 9
Asha NachiKritika PrabhakarNitesh KumarRaunaq ChawlaSeshu PinnamineniVijay Pal Singh
Growth since 1991Growth since 1991• ECONOMIC REFORMS POLICY INTRODUCED IN 1991
• AGRICULTURAL PRODUCTION INCREASED- CAPITAL INVESTMENT, BETTER FACILITIES, RESEARCH
• ELECTRICITY GENERATED INCREASED 50 FOLD, STEEL PRODUCTION ROSE, POVERTY REDUCED FROM 50% TO 26%
• FDI’s, FII’s LED TO INFRASTRUCTURE DEVELOPMENT, TECHNOLOGY UPGRADATION
• LAISSEZ FAIRE- INCREASE IN EARNINGS- GROWTH OF GDP. AVERAGE GROWTH RATE-6%
• GROWTH WAS SLOW- 2ND HALF OF 1990’s -DAMPENING EFFECT- INDIAN ECONOMY
• ECONOMIC REFORMS POLICY INTRODUCED IN 1991
• AGRICULTURAL PRODUCTION INCREASED- CAPITAL INVESTMENT, BETTER FACILITIES, RESEARCH
• ELECTRICITY GENERATED INCREASED 50 FOLD, STEEL PRODUCTION ROSE, POVERTY REDUCED FROM 50% TO 26%
• FDI’s, FII’s LED TO INFRASTRUCTURE DEVELOPMENT, TECHNOLOGY UPGRADATION
• LAISSEZ FAIRE- INCREASE IN EARNINGS- GROWTH OF GDP. AVERAGE GROWTH RATE-6%
• GROWTH WAS SLOW- 2ND HALF OF 1990’s -DAMPENING EFFECT- INDIAN ECONOMY
Exports and Imports
Exports and Imports
•Exports contracted by 15%
•Job losses across sectors
•Cost of imports
•Governments cuts excise and service taxes to improve the Export/import situation.
•Exports: $163 million v/s imports $230.5 million causing fiscal deficit
•Exports contracted by 15%
•Job losses across sectors
•Cost of imports
•Governments cuts excise and service taxes to improve the Export/import situation.
•Exports: $163 million v/s imports $230.5 million causing fiscal deficit
GDP TrendsGDP Trends
• Crossed US$ 1 trillion mark in April 2007
• Major industries – iron & steel, reality, energy, automobiles, aviation, textiles, cement, electronics & hardware, bio-technology, pharma, tourism
• 60% of the GDP is dependent on the domestic market and now the demand in the domestic market is seen to be loosing steam
• Growths in all the three main sectors of the overall industry were observed to decelerate as compared to that of the previous year
• sharp acceleration in the consumer goods segment in November 2008 by 4.4% , the growth came from the consumer durables segment that recorded a 7.3% increase
• Crossed US$ 1 trillion mark in April 2007
• Major industries – iron & steel, reality, energy, automobiles, aviation, textiles, cement, electronics & hardware, bio-technology, pharma, tourism
• 60% of the GDP is dependent on the domestic market and now the demand in the domestic market is seen to be loosing steam
• Growths in all the three main sectors of the overall industry were observed to decelerate as compared to that of the previous year
• sharp acceleration in the consumer goods segment in November 2008 by 4.4% , the growth came from the consumer durables segment that recorded a 7.3% increase
GDP TrendsGDP Trends• Quarterly GDP at factor
cost at constant (1999-2000) prices for Q3 of 2008-09 is Rs. 8,73,426 crore, as against Rs. 8,29,172 crore in Q3 of 2007-08 - growth rate of 5.3%
• GDP at factor cost at current prices in Q3 of 2008-09, is estimated at Rs. 13,04,468 crore against Rs. 11,43,862 of that in 2007-08 – increased 14.0%
• Quarterly GDP at factor cost at constant (1999-2000) prices for Q3 of 2008-09 is Rs. 8,73,426 crore, as against Rs. 8,29,172 crore in Q3 of 2007-08 - growth rate of 5.3%
• GDP at factor cost at current prices in Q3 of 2008-09, is estimated at Rs. 13,04,468 crore against Rs. 11,43,862 of that in 2007-08 – increased 14.0%
Human Development Index
Human Development Index
HDI Value Life Expectancy at birth(years)
Adult Literacy rate(% ages 15 and above)
Combined Primary , Secondary and Tertiary Gross Enrollment ratio
GDP per capita (PPP US$)
1.Iceland (0.968) 1. Japan
(82.3)
1.Georgia (100%)
1.Australia (113.0)
1.Luxembourg (60,228)
128.India (0.619)
125.India (63.7)
114.India (61)
122.India (63.8)
117.India (3,452)
177.Sierra Lone (0.336)
177.Zambia (40.5)
139. Burkina Fasco (23.6)
172.Nigeria (22.7)
174.Malawi (667)
HDI v/s GDP percapita
HDI v/s GDP percapita
HDI TrendsHDI Trends
Dragon v/s TigerDragon v/s Tiger• GDP growth in China averaged to 9.1% whereas In India
it is 6.1%.
• Alleviation of the poor in both countries
• China and India account for 5% and 2% of world’s GDP respectively
• Contribute to 37.5 % of worlds population
• China’s contribution to the world’s growth is 12.8% and India’s is 3.2%
• Other regions of growth are literacy late, bringing down population growth.
• FDI of China and India Sis $137 billion and $17.21 billion.
• GDP growth in China averaged to 9.1% whereas In India it is 6.1%.
• Alleviation of the poor in both countries
• China and India account for 5% and 2% of world’s GDP respectively
• Contribute to 37.5 % of worlds population
• China’s contribution to the world’s growth is 12.8% and India’s is 3.2%
• Other regions of growth are literacy late, bringing down population growth.
• FDI of China and India Sis $137 billion and $17.21 billion.
The Recession effect
The Recession effect
While imports have steadily increased, exports are moving
south
Oil imports have the biggest chunk of
Exports
The GDP estimates have been declining
since 2008
Impact on Finance Channels
Impact on Finance Channels
•Equity Markets•Equity Markets
The Great Indian equity dream seems
to be over
The sensex has lost over
10,000 points in the last year
Impact on Finance Channels
Impact on Finance Channels
•Forex Markets•Forex MarketsThe Rupee has
touched all time low of 51.50.
Depreciation of rupee makes
external borrowings costlier.
The corporates have undertaken external
commercial borrowings to finance their businesses and
the volumes have grown substantially over the years(see
fig.)
Impact on Finance Channels
Impact on Finance Channels
•Credit Markets•Credit Markets
bank credit continues to expand and showed
growth of 27.7% in 2008-09
As banks are central to trade, this may
indicate an increase in NPAs
Impact on Finance Channels
Impact on Finance Channels
•Foreign capital Inflows•Foreign capital Inflows
The FII for 2008 (till November 19, 2008)
in equity markets show outflow of USD
13 billion and an inflow of USD 2.3
billion in debt markets, leading to a total FII outflow of
10.7 billion).
Change in GDP growth during US Recession
Change in GDP growth during US Recession
Interestingly, every time there has been an global economic downturn,
India has remained Insulated(positive GDP growth)!!!
The only thing constant is ‘CHANGE’
The only thing constant is ‘CHANGE’
Although, people are positive about India on the world stage, ground realities show a different
picture....
Source: WEF Global competitiveness report 2009
Thank You!Thank You!