business environment swot analysis of indian economy
TRANSCRIPT
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SWOT ANALYSIS OF INDIAN
ECONOMYBUSINESS ENVIRONMENT
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INTRODUCTION
India is the 10th largest economy in world in
terms of GDP 3rd largest by PPP.
Population: 1.22 billion
Yearly increase: 18 million
Major group: 50% - 025 years
More than 1.53 billion people by the end of 2030.
Average life expectancy: 68.6 years Economic growth rate slowed to around 5.3% for
the 201213 fiscal year.
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STRENGTH
Agriculture
High percentage of cultivable land 56.78%
Huge English speaking population
Availability of skilled manpower
Extensive Higher Education
Diversified nature of the economy System
Third largest reservoir of engineers
High growth rate of economy
Rapid growth of IT and BPO sector brining valuableforeign exchange
Abundance of natural resources
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Weakness
Rural poverty leads horrible wave of suicides by indebtedfarmersPresence of Vast Industrial sicknessIn rural India, about 34 percent of the population lives on
less than $1.25 a dayCoal Mines CorruptionIllegal allotment and Kick BacksInequality in prevailing socio economic conditionsPoor infrastructural facilitiesHuge population leading to scarcity of resources
Low literacy rateUnequal distribution of wealthRural urban divide, leading to inequality of highstandards
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Opportunities
Scope for entry of private firms in various sectors forbusiness
Inflow of Foreign Direct Investment
Huge foreign exchange earnings
Area of biotechnology Area of Infrastructure
Huge Domestic Market
Huge agricultural resources, fishing, plantation crops,livestock
Investment in R & D, engineering design Huge population of India in foreign countries . Vast forest area and diverse wildlife
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CONCLUSION
Indian economy is robust in nature
Banking & credit system have been able to
survive the down turn.
Youth of INDIA
Economists predict that India economy will
be the third largest by 2025 after USA &China
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Overview of the 11th Five
Year Plan (2007 - 2012)
As per syllabus
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Income & Poverty
Accelerate growth rate of GDP from 8% to 10%and then maintain at 10% in the 12th Plan inorder to double per capita income by 2016-17.
Increase agricultural GDP growth rate to 4% peryear.
Reduce educated unemployment to below 5%. Raise real wage rate of unskilled workers by 20
percent. 11th Five Year Plan Target
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Education
Reduce dropout rates of children from elementary school from52.2% in 2003-04 to 20% by 2011-12.
Increase literacy rate for persons of age 7 years or more to 85%. Lower gender gap in literacy to 10 percentage points. Increase the percentage of each cohort going to higher education
from the present 10% to 15% by the end of the 11th Plan. Provide clean drinking water for all by 2009 and ensure that thereare no slip-backs by the end of the 11th Plan.
Reduce malnutrition among children of age group 0-3 to half itspresent level.
Reduce anemia among women and girls by 50% by the end of the
11th Plan.
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Health
Ensure that at least 33 percent of thedirect and indirect beneficiaries of allgovernment schemes are women and girl
children.
Ensure that all children enjoy a safechildhood, without any compulsion to work
Women and Children
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Infrastructure
Ensure electricity connection to all villages and BPL households by2009 and round-the-clock power by the end of the Plan.
Ensure all-weather road connection to all habitation with population1000 and above (500 in hilly and tribal areas) by 2009, and ensurecoverage of all significant habitation by 2015.
Connect every village by telephone by November 2007 and providebroadband connectivity to all villages by 2012.
Provide homestead sites to all by 2012 and step up the pace ofhouse construction for rural poor to cover all the poor by 2016-17.
Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12.
Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17 Environment
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Conclusion
Economic Planning help in mobilizing andallocating the resources in desired manner.
Objective of economic planning is to reduce
inequality, economic growth, balanced regionalgrowth, modernization.
Each five year plan aims at achieving certaintarget. Five year plan constitute the steps towardthe fulfillment of objectives of economicplanning.
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Overview of the 12th Five
Year Plan (2012 - 2017)
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Twelfth Plan Strategy
There are Short Term and Medium TermChallenges
Short Term : Reverse the current growth
slowdown :5.5 percent in 2012-13,Aim for 6.5 to 7 percent in 2013-14
Longer Term : Get back to high growth. Thisrequires accelerating from 5.5% in 2012-13 toover 9% in last two years
This is very difficult, especially given the globalsituation
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Growth must not only be rapid, butalso more inclusive
Inclusiveness is a multi-dimensional concept :
Reduce poverty
Improve regional equality across states and
within statesImprove conditions for SCs, STs, OBCs,Minorities
Generate attractive employment opportunities
for youthClose gender gaps
Twelfth Plan lists 25 monitorable indicators
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25 Monitorable Targets, e.g.
Average GDP Growth of 8 percent
Agriculture Growth of 4 percent
Reducing head-count poverty by 10 percentage point
Generating 50 million work opportunities
Eliminating gender and social gap in education
Reducing IMR to 25, MMR to 100 and TFR to 2.1
Enhance infrastructure investment to 9% of GDP
Achieve universal road connectivity and access to powerfor all villages
Access to banking services for 90 percent households
Major welfare benefits and subsidies via Aadhaar
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Strategy for AchievingInclusiveness
There are two routes to inclusivenessthrough higher growth which expands income and employmentopportunities
through government pro-poor programmes which target poorergroups
Both are important. Twelfth Plan combines the pro-poorprogramme approach with efforts to get a growth patternwhich is faster and inherently more inclusive
Two routes are mutually reinforcing
High growth generates more revenues, to finance inclusivenessprogrammes
Many inclusiveness programmes (health and education)contribute to growth
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Macro-Economic Challenges inAchieving High Growth
Must increase the rate of investment, especially ininfrastructure
Domestic savings must increase even more to reduce theinvestment saving gap which is necessary to keep theCurrent Account Deficit under control
Government dis-savings must be eliminated. This meansfiscal deficit must be reduced
Growth of subsidies has to be contained 75% of the investment in the economy is private
investment (household plus corporate) Both the Centre and the States have to create an eco-system that encourages private investment
Infrastructure, especially quality of power, and availabilityof skills is critical
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Effectiveness of Plan Programmes
Twelfth Plan sets ambitious targets for FlagshipProgrammes in areas of Health, Education, Ruralinfrastructure, Livelihood Development etc.
Too much focus on the level of expenditure in theseprogrammes. Not enough on effectiveness in terms ofend results
Implementation in the field is the responsibility of StateGovernment agencies. However, programme guidelinesare set by the Central Government
There are demands for greater flexibility from states. We
are responding as follows :Guidelines are being made more flexible to meet therequirements of individual States10% flexi-fund within each scheme for innovations
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Energy
8 percent GDP growth requires 6 percent growth inenergy supply from all sources
Our fossil fuel resources are limited, and our importdependence is already high
Enhanced Energy Efficiency in all sectors We need to push push for renewable Energy: Wind, Solarand Storage Hydro
Difficult Policy Issues:Coal vs. Forest Cover
Petroleum Price DistortionsNatural Gas Exploration FrameworkAll Energy Prices: Coal, Petroleum product, Natural Gas andElectric power are currently under priced. Fuel adjustment isneeded
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Water
Management of water resource is a major challenge.Estimates of water availability have been optimistic
Twelfth Plan proposes modified AIBP and expandedWatershed Management Programme
Water sector needs better Regulatory FrameworkNew Groundwater Law
Water Regulatory Authorities in each state
National Water Framework Law
Agriculture accounts for 80% of water use at present,must shift to more water efficient agriculture practices
Manage urban and industrial water demand through waterrecycling and rationalise user charges
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Alternative Scenarios
12th Plan goal of 8% inclusive growth is not aforegone conclusion
Depends on difficult policy decisions to be taken
by Centre and States For the first time Plan presents three scenarios Strong Inclusive Growth 8%
Insufficient Action 6 to 6.5%
Policy logjam 5 to 5.5% Anything much less than 8% will not satisfy
aspirations of the people