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IndianEconomy

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Part 1:Historical

Overview

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Pre-LPG Inward looking economy

Shortage & premiums / sellers market / monop

Conserve forex / import substitution

Feeling of shortage in the economy

Huge trade deficit / forex reserves - $1 bn

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First Generation Reforms Delicensing / import liberalization

Taxation reform direct & indirect

Relaxed forex norms Allowed FII & FDI

Dividend repatriation

Stock Exchange reforms

SEBI Banking sector reforms Pvt banks allowed

RBI relaxes controls

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Infrastructure

Telecom reforms

Insurance GIC & LIC

Labour law reforms

Disinvestment

Power sector reforms

Second Generation Reforms

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Part 2:

Vital Statistics

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Population 118 crore

Population growth rate 1.37% (2010 est)

GDP (nominal) $1.3 trillionGlobal Rank 11

GDP (PPP)$3.8 trillion

Global Rank 4

GDP growth rate 7.4% in 2009-10

Per capita income $947 (2010 est)

Forex Reserves $290 billion (Dec 2010)

Literacy Rate 64%

Unemployment rate 9.20%

Working Age Population 46.7 crore (2009)

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India: Basic Features Low per capita income / High population

Dependence on Agri / High rural pop

High density of population 324/sq km

High rate of unemployment

Unequal distribution of wealth

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Still high rate of illiteracy

Low 2010 HDI rank 119

Low level of technology and productivity

Widespread poverty

46% of children suffer from malnutrition

High savings and low capital formation

India: Basic Features

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Part 3:Sector-wise Analysis

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3 Sectors of Economy Primary agriculture, forestry, fishery,

animal husbandry

Secondary mineral, power, mining,manufacturing industries

Services transport, trade, communication,banking, other services

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Indian Economy Today

Three main sectors of the economy:

Agriculture: 2nd in the world in farm

output

Manufacturing: 14th in the world in

industrial output Services: 15th in the world in output

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GDP - Sector Composition

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Distribution of Workforce

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Agriculture Sector Overview

Targeted growth rate of 4%

Green / Blue / White / Yellow Revolutions

43% land arable

60% of arable land monsoon dependent

MSP on pulses, oilseeds, sugarcane

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Superlatives Largest producer of Tea, Jute, Milk, Pulses

Largest buffalo livestock

Second largest producer of wheat, rice,fish, vegetables, groundnuts

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Strengths Huge arable land area (second

largest)

Diverse soil types, climate

Huge labour force

Government focus, subsidies

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Weaknesses Fragmented land holdings

59% of holdings are marginal (

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Landless labour

Seasonal unemployment

Poor infrastructure Electricity Roads and transport Farm mechanization

Illiteracy Low awareness about improved methods /

products

Weaknesses

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State disparity

Financing at usurious rates bylocal moneylenders

Low remuneration to farmer

middleman

Antiquated laws

Weaknesses

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Opportunities Horticulture

Organic Farming

Fisheries

Packaged / processed farm products

Productivity improvements

Use of IT / Communications

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Industrial Sector Overview Growth rate of 11.3% in H1 2010-11

Size:

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Main Industries Textile (largest employer, 4% GDP)

Synthetic fibers

Mineral products / chemicals

Automobiles + components

Cement / machinery and equipment

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Huge, low-cost labour force

Educated, skilled workforce

English Language skills

Good Managerial Skills

Variety of raw materials available Strong Economy

Stable Polity

Strengths

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Lack of infrastructure

High cost of utilities

Red tape Number of days to start a business in India is 88

days

Cascading effect of indirect taxes

High cost of finance

Tardy judicial system

Weaknesses

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Drugs & Pharmaceuticals

Textiles

Transport

Biotechnology

Automobiles + Components

Engineering goods

Opportunities

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Services Sector Overview High growth rate over 11%

Growth - not sector specific

Concentration in urban areas

India ranks 12th in commercial services

exports

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Key Sectors Hotels + Tourism

Trade + Transport

Communication

Financial / Insurance / Banking / Real

Estate IT & ITeS

Social + Personal Services

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Huge educated labour force

Low labour cost: only 14% of U.S. labour

cost

Factor cost advantage for foreign co

Less capital intensive thanmanufacturing

Inherent advantages in tourism, health

Strengths

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High attrition rates in IT and BPOindustry

Lack of world-class infrastructure

Dearth of highly-skilled labour

Low investment in R&D and highereducation

Weaknesses

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Health + Medical Tourism

Hospitality

Off-shore consultancy

Retail

KPOs

Opportunities

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Part 4:India and the World

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Top 5 Export Partners in 09-10Country % Share of

Total Exports

UAE 13.4

USA 10.9

China 6.4

Hong Kong 4.4

Singapore 4.2

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Top 5 Import Partners in 09-10Country % Share of

Total Exports

China 10.7

UAE 6.7

Saudi Arabia 5.91

USA 5.90

Australia 4.3

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