INDIA

PRESENTED BY - GROUP 1

DUSHYANT SAURAV

ROOPSA

RASLEEN

SANKALP SAGAR

INDIA AS AN EMERGING ECONOMY

One of the largest emerging economy Huge investment opportunities Low wage rate More productive manufacturing sectorStrong Banking sectorHuge talent pool in a rapidly growing middle classForward growing trend in middle classForward growing trend in urbanization

HUMAN DEVELOPMENT INDEX

India ranks 136 in human development Index

Brazil 0.730

Russia 0.788

India 0.554

China 0.699

South Africa 0.629

MAJOR CHALLENGES IN INDIAN ECONOMY

Sustaining and achieving annual average growth of 9-10 %Providing investor friendly laws and tax system Current Account DeficitFiscal DeficitDeveloping world-class infrastructure for sustaining growth in all the sectors of the economyDepreciation of CurrencyPolitical environmental barrier for FDIInflationAllowing foreign investment in more areas

YEARDEVELOPING COUNTRIES

INDIANN GDP

2012 4.7 3.22013 4.8 4.82014 5.3 6.22015 5.5 6.62016 5.7 7.1 2012 2013 2014 2015 2016

0

1

2

3

4

5

6

7

Projected Growth

DEVELOPING COUNTRIES INDIANN GDP

Projected Growth of India GDP

Source-indiabudget.nic.in

FISCAL POLICIES

Fiscal policy deals with the taxation and expenditure decisions of the government

Fiscal deficit for the current fiscal year is 4.6 % of the GDP , smaller than 4.9 % recorded previous year

Government is focusing on tax reforms and targeting social expenditures to achieve fiscal consolidation

It aimed at reducing fiscal deficit, revenue deficit & borrowings from the RBI

MONETARY POLICIES

The part of the economic policy which regulates the level of money in the economy in order to achieve certain objectives.

Central Bank of the country controls the monetary policy of the country

It aims at price stability , economic growth , employment & flow of credit

CURRENT MONETARY POLICIES TOOLS RBI increases bank rate from 8.75% to 9% on 28th January,2014

Present cash reserve ratio is 4% continuing from 30th December 2012

Current SLR is 23% since 11th October,2012

Repo rate has increased from 7.75% to 8% on 28th January,2014

Reserve repo rate has also increased from 6.75% to 7% on 28th January,2014

EXCHANGE RATES

INDIA’S CURRENT ACCOUNT

BALANCE OF PAYMENT TRENDS IN JULY-SEPTEMBER 2013

• India’s current account deficit (CAD) narrowed sharply to US$ 5.2 billion in Q2 of 2013-14 from US$ 21.0 billion.

• Merchandise exports increased by 11.9 per cent to US$ 81.2 billion in Q2 of 2013-14

• Merchandise imports at US$ 114.5 billion, recorded a decline of 4.8 per cent in Q2 of 2013-14 as compared with a decline of 3.0 per cent in Q2 of 2012-13

• As a result, the merchandise trade deficit (bop basis) contracted to US$ 33.3 billion in Q2 of 2013-14 from US$ 47.8 billion

SOURCE: RBI WEBSITE

INDIA’S EXTERNAL DEBT

• Currently india's total external debt is 21.7% of gdp.

• Foreign debt service ratio ( principal and interest payments on the foreign debt as a percent of t0tal exports of goods and services) is 5.9 percent in 2012-13.

• India aiso had a sizeable cushion of international reserves totaling us $ 291 billion in jan 2014 to draw on if there should be capital flight out of the country for any reason.

FREE TRADE ZONES

• Free trade zones were established by the government of india to promote export-oriented production. This step was taken in order to increase exports and thus reduce the current account deficit.

• Special economic zones (sez)

• Export processing zones( epz)

• Software technology parks (stp)

FINANCIAL SECTOR REFORMS

• Service sector is a key driver of growth.

• India is expected to grant banking licenses to private-sector banking and non-banking finance companies.

• Foreign banks play important role in financial innovation.

• Exports proceeds payments must be received only through banking channels.