india economy and china economy

8/14/2019 INDIA ECONOMY AND CHINA ECONOMY

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S.MA07M


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INTRODUCT IONINTRODUCT IONEconomics experts and

studies conducted across the globeIndia and China to rule the world in

century. For over a century theStates has been the largest economyworld but major developments havplace in the world economy sin

leading to the shift of focus from ththe rich countries of Europe to Asian giants- India and


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INDIAN ECONOMINDIAN ECONOMfourth largest economy in terms of purcha

power parityexperienced a GDP growth of 9.0 percen

2005-06 to 9.4 percent during 200will overtake Japan and become third ma

economic power within 10 years.India have undergone tremendous infrastr

up gradation but the situation in not similar part of rural India.


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TURN ING PO INTTURN ING PO INTThe collapse of the Soviet Union , which was I

trading partner caused a spike in oil prices so Ipay back loans

In response, Prime Minister Narasimha Rao afinance minister Manmohan Singh initiated theliberalisation of 1991

ended many public monopolies, allowing automatiof foreign direct investment in many sectors.

Since then, the overall direction of liberalization hathe same, irrespective of the ruling party

Since 1990 India has emerged as one of the wealteconomies in the developing world

It was predicted that

India's GDP in current priceFrance and Italy by 2020, Germany, UK and Russia

and Japan by 2035. By 2035, it was projected to be thlargest economy of the world, behind US and C


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Sectors of Indian E co nSectors of Indian E co n

The three sectors which lead to thdevelopment of Indian economy are Agriculture

IndustryService


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Ag r iculture Ag r iculture

India ranks second worldwide in farm o Agriculture and allied sectors like fores

and fishing accounted for 18.6% of the GDemployed 60% of the total workforce

India is the largest producer of Tea, jute.Indian total milk production is highest in tIndia is placed third, having second larges

production in wheat and rice and the largestproduction in pulses.

strengthening R&D and improvements in harvest management technologies will give boost to Indian agriculture.


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INDUSTRYINDUSTRYIndia is fourteenth in the world in fa

output.They together account for 27.6% of th

employ 17% of the total workforceIndustry needs to grow rapidly not onl

boost the overall growth rate but also to gainful employment


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W orl d Rank C omp an y Ind ustry Reve nue(b illio n $)

239 Oil and Natural Gas

Corporation

Oil & Gas Operations 15.64

258 Reliance Industries Oil & Gas Operations 18.05

326 State Bank of India Banking 13.66

399 Indian Oil Corporation Oil & Gas Operations 34.22

494 NTPC Utilities 6.06

536 ICICI Bank Banking 5.79

800 Steel Authority of India Limited Materials 6.30

1047 Tata Consultancy Svcs Software & Services 2.98

1128 Tata Steel Materials 4.54

STAND ING OF INDI AN COMPAN IES IN 2005


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Serv icesServ icesIndia is fifteenth in services output.It provides employment to 23% of work force, and

growing fasthas the largest share in the GDP, accounting for 53

2005 up from 15% in 1950.

Trade hotels, transport & communications have wihighest growth of level 10.9% in 2004IT enabled services, such as Business Process Out

have been growing rapidly in the recent past and wilto rise.

India's large number of English speaking skilled m

has made India a major exporter of software servicsoftware workers.The Tsunami disaster was expected to have a negat

impact on India's tourism but nothing of that sort wafact, tourist arrivals rose 23.5 percent in Dec 2004 an


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CHALLENGESCHALLENGESSustaining the growth momentum and achieving an

average growth of 7-8 % in the next five years.Checking the growth of population; India is the

highest populated country in the world after China. Hterms of density India exceeds China as India's almost half of China's total land. Due to a high populgrowth, GN I per capita remains very poor. It was2003 (World Bank figures).

Boosting agricultural growth through diversificatiodevelopment of agro processing.

Developing world-class infrastructure for sustaininall the sectors of the economy.

Allowing foreign investment in more areasEmpowering the population through universal edu

health care. India needs to improve its HD I rankway below many other developing countries' perform


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DRAWBACKSDRAWBACKSpoverty

Wealth distribution in India is fairly unevenwith the top 10% of income groups earning 33% of official figures estimate that 27.5% of Indians sti

national poverty line in 2004-2005.

70% of Indians, or 800 million people, lived on lessrupees per day

Corrupt io nIt takes the form of bribes , evasion of tax and

controls , embezzlement , etc.The T I India study estimates the monetary value o

corruption in 11 basic services provided by the goverbe around Rs.21,068 crores.


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Cont..Cont..U n employme n t

Unemployment in India is characterised by cunderemployment or disguised unemploymen

Government schemes to solve the problem, byfinancial assistance for setting up businesses, sksetting up public sector enterprises

Re gi o na l imb a lan ceOne of the critical problems facing India's econom

is the sharp and growing regional variationsindustries still tend to concentrate around urban

areas and port citiesstate governments of backward regions are trying to

reduce the disparities by offering tax holidays, cheapland, etc.,


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SECTORS IN CH INA ECOSECTORS IN CH INA ECO Agriculture

Main ag r icultur a l pro ducts:wheat , potatoes , sorghum , pean

millet, barley , cotton , oilseed , pChina ranks first worldwide in

outputJust under half of China's labor

engaged in agricultureonly about 15.4% of the land is

for cultivation.

Chinaeconomy


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Ind ustry and m an uf a ctur ingChina ranks third worldwide in

output.Main ind ustr ies: iron and ste

machinery , armaments , textilesapparel , petroleum , cement , che

footwear , toys , food processing ,automobiles , consumer electronictelecommunications , informationtechnology .

Industry and construction produc

53.1% of Chinas gross domestic p(GDP) in 2005.occupied 22.5% of the workfo


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Serv icesIn 2005 the services sector prod

40.3% of Chinas gross domestic pPrior to the onset of economic r

in 1978, Chinas services sector wcharacterized by state-operatedrationing , and regulated prices.

After reform private markets anindividual entrepreneurs and entermarket


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challengeschallengeso To complete the reform of the banking and ensure a stable macroeconomicenvironment.

o Policy changes are needed to reduce thdisparities between rural and urban incomincrease the pace of urbanization.o Welfare would also be improved by fureductions in the high level of pollution.


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INDIA CHINA

GDP (purch a s ing power p a r ity )

$4.164 trillion $10.21 t

GDP - re a l g rowth r a te 9.4% 11.1%

U n employme n t r a te 7.8% 4.2%

Popul a tio n below poverty lin e

25% 10%

Infla tio n r a te 6.2% 1.7%

Ex ports $123.2 billion $969.7 b

Imports $184.4 billion $751.9 b

Comparision of India and C


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W hy Fa vor Investme n t OpportuW hy Fa vor Investme n t OpportuIndia over Ch ina?India over Ch ina?

The India story is only getting started, large portion of the China story is over.

Figures regarding economic analysis em

from China are almost always suspect.In China large concentration are state-o

enterprises.Sustainability is a big factor, as well.


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Arguments against Lionizin Arguments against LionizinChinaChina

Chinese statistics are always a suspectReturning profits from abroad is classifie

which truly is not. A Communist controlled economy where

and wages are fixed by the state cannot havinflation; hence any reporting of these numbmisrepresentation. Acid rain problem with SO2 spewing coal

power plants. This is eating away their cultiland.

With per capita income well below South they suddenly cannot claim to be an advanc

Chinese money stuck in the Western bankof security for huge FD I investment in Chcannot retend to be rich.


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Stand after 20 yearsStand after 20 yearsBy 2025, China will still be ahead of India

its economy but India will be right behind it. TGNP in India will be higher.

Next 20 years will see more young people in which will put a significant pressure on their peincome

In India all infrastructure investments have selement of private participation and are driven bconsiderations.

The Chinese understand physical assets andcommodities. They just don't understand the knindustry and intellectual capital. India is mileChina in the development of its knowledge indu

Indias media and advertising industries are wChina imitates foreign R&D

Only 10% of India' s eco nomy is dependeinternational trade versus 40-50% of Ch ina


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india economy and china economy

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