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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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