indian economic condition
TRANSCRIPT
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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.