indian economy - copy

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THE ECONOMY OF

OUR COUNTRY….

PRESENTERS:POONAM. M (13)ABHILASH.V(1)DEEPALI.J (3)RACHANA.S (14)

JAIMIN.J ( )DEEPAK.R (15)



OUR COUNTRY….

Steel, mining, machine tools, water, telecommunications, insurance,and electrical plants, among other industries, were effectively nationalizedin the mid-1950s.

Economy transformed from primarily agriculture, forestry, fishing, andtextile manufacturing in 1947 to major heavy industry, transportation, andtelecommunications industries by late 1970s

According to economic historian ‘Angus Maddison’ in his book The World Economy: A Millennial Perspective, India had the world's largest economy

from the 1st century to 11th century, with a 32.9% share of world GDP inthe 1st century to 28.9% in 1000 CE

The Arthasastra is one of the most important ancient texts oneconomics, politics and administration

History of IndependentIndian Economy

History of Independent Indian Economy



• Low Per Capita Income

• Low Standard of Living, High Poverty

• Unequal Income Distribution

• Dominance of Agriculture

• Existence of Rich Resources

• Inadequate Capital Formation

• Unemployment and Underemployment• Technological Backwardness

• Infrastructural Inadequacies

•

Dualistic Economy



Agriculture

Industries

Finance

Services

Natural Resource



India ranks second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing accounted

for 15.7% of the GDP in 2009–10, employed 52.1% of the total workforce,and despite a steady decline of its share in the GDP, is still the largesteconomic sector and a significant piece of the overall socio-economicdevelopment of India.

India is the largest producer in the world of milk, jute and pulses, and alsohas the world's second largest cattle population with 175 million animalsin 2008.

It is the second largest producer of rice, wheat, sugarcane, cotton and

groundnuts, as well as the second largest fruit and vegetable producer,accounting for 10.9% and 8.6% of the world fruit and vegetableproduction respectively.[India is also the second largest producer and thelargest consumer of silk in the world, producing 77,000 million tons in2005



India has one of the world's fastest growing automobile industries.

Industry accounts for 28% of the GDP and employ 14% of the totalworkforce. In absolute terms, India is 12th in the world in terms of nominalfactory output.

India is 13th in services output. The services sector provides employmentto 23% of the work force and is growing quickly, with a growth rate of 7.5%in 1991–2000, up from 4.5% in 1951–80. It has the largest share in the GDP,accounting for 55% in 2007, up from 15% in 1950.

Information technology and business process outsourcing are among the

fastest growing sectors, having a cumulative growth rate of revenue 33.6%between 1997–98 and 2002–03 and contributing to 25% of the country'stotal exports in 2007–08.

The share of the Indian IT industry in the country's GDP increased from4.8 % in 2005–06 to 7% in 2008



The Indian money market is classified into the organised sector and theunorganised sector.

The total bank deposits increased from 5,910 crore in 1970–71 to 3,830,922

crore in 2008–09.

Despite an increase of rural branches, from 1,860 or 22% of the totalnumber of branches in 1969 to 30,590 or 42% in 2007, only 32,270 out of 500,000 villages are covered by a scheduled bank.

India's gross domestic saving in 2006–07 as a percentage of GDP stood ata high 32.7%.

The public sector banks hold over 75% of total assets of the bankingindustry, with the private and foreign banks holding 18.2% and 6.5%

respectively

http://en.wikipedia.org/wiki/File:ONGC_Oil_Platform.jpg



As of 2010, India imported about 70% of its crude oil requirements.

As of 2009, India is the fourth largest producer of electricity and oil products and the fourthlargest importer of coal and crude-oil in the world.

Coal and oil together account for 66 % of the energy consumption of India

India's oil reserves meet 25% of the country's domestic oil demand.

The petroleum industry in India mostly consists of public sector companies such as Oil andNatural Gas Corporation (ONGC), Hindustan Petroleum Corporation Limited (HPCL) andIndian Oil Corporation Limited (IOCL). There are some major private Indian companies inthe oil sector such as Reliance Industries Limited (RIL) which operates the world's largestoil refining complex.

As of December 2011, India had an installed power generation capacity of 185.5 GigaWatts(GW), of which thermal power contributed 65.87%, hydroelectricity 20.75%, othersources of renewable energy 10.80%, and nuclear power 2.56%.

India meets most of its domestic energy demand through its 106 billion tonnes of coalreserves.

India is also rich in certain renewable sources of energy with significant future potential

such as solar, wind and biofuels (jatropha, sugarcane). India's huge thorium reserves – about 25% of world's reserves

http://en.wikipedia.org/wiki/File:ONGC_Oil_Platform.jpg



India has the world's third largest road network, covering more than4.3 million kilometres and carrying 60% of freight and 87% of passengertraffic.

Indian Railways is the fourth largest rail network in the world, with a track

length of 114,500 kilometres.

India has 13 major ports, handling a cargo volume of 850 million tonnes in2010.

India has a national teledensity rate of 74.15% with 926.53 million telephonesubscribers, two-thirds of them in urban areas,but Internet use is rare, witharound 13.3 million broadband lines in India in December 2011.

However, this is growing and is expected to boom following the expansionof 3G and wimax services



In his maiden budget speech as the finance minister of India, Singh presented the

finances of a country that was nearly bankrupt and slayed the licence raj, thereby

changing the lives of not just India's 84 crore citizens then but those of another

36 crore citizens who have been born since..



How much has India changed since then? Since 1991, India's GDP has quadrupled, its forex reserves have

surged from $5.8 billion to $279 billion, and exports from $18 billion to $178 billion. But these are just numbers. The change in our lives and lifestyles is a lot more fascinating. Back in 1991,

owning a Maruti 800 (Rs 1.48 lakh in Delhi) was a middle- class status symbol.



Scooters like Bajaj Chetak and Lambretta accounted for more than half of the two-wheelers sold in the country. A bottle of

soft drink, be it desi versions like Gold Spot or Thums Up, cost just Rs 4.50. Today, we are one of the consumption engines of the world as we are guzzling colas, downloading music on our iPads and

zipping around in our sedans. The cola market is worth about Rs 10,000 crore, up from just Rs 200 crore in 1991.



Scooters, like we knew them, are almost dead. And all of this change can be traced back to that speech that

Singh made twenty years ago.



1971 was Socialist India



1971 was Socialist India.

2011 is India, still with many problems, a

flourishing market economy.



BIRD’S EYEVIEW TO

THE STATISTICS OF

THE INDIAN

ECONOMY-2011



BUDGET OVERVIEW:



Problem of Poverty

Problem of Population

Problem of Unemployment RegionalImbalances Inequalities of Income and

Wealth in India Foreign Trade & Balance of Payments



Global Crisis

Inflation

Corruption

Political Environment

Neighbour countries of India

Terrorism



Macroeconomic Overview The high growth rate that has been achieved in the Indian economy has not translateditself into development for all sections of the populationIn the year 2010-11, more than Rs 88000 crore was provided as tax concessions to thecorporate sector only. Secondly, it is not only enough that these tax concessions areprovided to the corporates. Additionally, the government has to show with acts anddeeds that they are ready to hand over public assets to the private sector for ensuring‘investor confidence’.

Thirdly, finance capital always abhors government intervention in the market, which isdetrimental to its own benefit.

Food, Inflation and Agriculture The Economic Survey 2010-11 says that continued high food inflation is a concern

facing the Indian economy and the policy makersthe Survey points out that there has been monetary easing in the advanced countries,because of which there exists a higher money supply in the world economy which aredriving up the pricesThe problem with global food inflation is that there has been a systematic decline inthe global food production

Challenges before Indian Economy

Financial Sector Liberalization

All over the world a vigorous debate is taking place on the issue of financial liberalization in the aftermath of the global crisis



All over the world, a vigorous debate is taking place on the issue of financial liberalization in the aftermath of the global crisis.

External Sector

India’s situation in the external sector is also a matter of worry. The current account balance has been in the

negative for the last 5 years, but it is now reaching 3.5% of GDP, which is very high. This rise in the currentaccount deficit has been due to a moderate slowdown in the growth rate of exports but more importantly as a

result of an increase in the growth rate of imports. An increase in imports is a natural corollary of a growingeconomy

Added to this problem of current account

deficit, there also exists the problem of shortterm capital flows into India. Since theadvanced capitalist countries are still in acrisis, global finance in search of more profitshas found their destinations in the developingcountries like India and China.

India's GDP Growth Slows to 6 9%



The Indian economy expanded at its slowest pace in more than two years in the July-September quarter, hurt by high local borrowing costs and a deepening euro-zone crisis.

Gross domestic product grew 6.9% from a year earlier, the government said Wednesday. Theeconomy had expanded 7.8% in the January-March quarter.

The mining sector contracted 2.9 percent year-on-year, following 1.8 percent growth in the

preceding quarter. The growth in manufacturing output eased sharply to 2.7 percent from 7.2

percent in the previous three months.

Farm output rose 3.2 percent for the same period, down from the previous quarter's 3.9 per

cent growth. Economic activities relating to electricity, gas and water supply increased 9.8percent, while the construction sector grew at an improved rate of 4.3 percent.

Investment climbed 30.5 percent from a year earlier, while consumer spending grew at a

weaker pace of 59.5 percent. Government spending rose 10.7 percent, almost steady

compared to the prior quarter.

Aggressive rate increases by the Reserve Bank of India over the past 20 months to cool

inflation have crimped industrial expansion, adding to pressure from a gloomy global

economy that has hurt demand for exports.

The slow pace of economic reform and a series of graft charges against the government have

f h d i i ff i f i i

India s GDP Growth Slows to 6.9%

indian economy - copy

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