india position in world economy

Linking INDIA to World Economy

INDIA’S SHARE IN WORLD ECONOMY


INDIA’S SHARE IN WORLD ECONOMY

It is divided into 3 Eras :

Pre- colonial (Early 17th Century) British Colonial (17th till 1945) After Independence ( After 1945 till

Now)


Independence to 1991

Influence by British Colonial Experience.

With strong emphasis on (a) Import substitution(b) Industrialization(c) State Intervention(d) Business regulation (e) Central planning(f) Capital Industries


After 1991

Since 1990 India has emerged as one of the wealthiest economies in the developing world; during this period, the economy has grown constantly, but with a few major setbacks. This has been accompanied by increases in life expectancy, literacy rates and food security.


India’s Contribution to World’s Economy

Government Intervention

Major improvements in educational standards across India.

In the late 80’s the government led by Rajiv Gandhi eased restrictions on capacity expansion for incumbents, removed price controls and reduced corporate taxes. While this increased the rate of growth, it also led to high fiscal deficits and a worsening current account.



Public Receipts The tax reforms, initiated in 1991:

(a) Reducing the rates of individual and corporate income taxes, excises, customs and making it more progressive

(b) Reducing exemptions and concessions .

(c) Simplification of laws and procedures. (d) Introduction of PAN to track

monetary transactions.



Public Receipt

Tax receipts of Centre & State amount to approximately 18% of national GDP.

limited resources of Government affect its ability to pay fair wages to public servants. This may well be the cause of endemic corruption at all levels of government.



Physical Infrastructure

India's low spending on power, construction, transportation, telecommunications and real estate, at $31 billion or 6% of GDP in 2002 had prevented India from sustaining higher growth rates.

India holds 2nd position in the world in roadways' construction, more than twice that of China.



Agriculture Sector Agriculture & allied sectors like

forestry logging and fishing accounted for 16.6% of the GDP in 2007.

2nd largest world-wide in farm output.



Industry India is 14th in the world in Factory

Output.

Account for 27.6% of the GDP and employ 17% of the total workforce.



According to Forbes Global2000 ranking for 2008, Five leading companies are:

World Rank Company Market valve(billion $)

193 Reliance Industry 89.29

198 ONGC 54.11

219 SBI 33.29

303 Indian Oil Corporation

16.36

374 ICICI Bank 29.85



Service Sector India is 15th in service output.

It provides employment to 23% of work force, and it is growing fast, growth rate 7.5% in 1991–2000 up from 4.5% in 1951–80.

Contribution of IT to GDP increased to 4.8 % in 2005-06 and is projected to increase to 7% of GDP in 2008.


GDP Growth in Current Decade


Contribution to GDP growth

1951-51 2007-08


Balance of Payments


Growth of Employment

China and India’s Share in World GDP.

Angus Maddison, World Economy, 2001

0%

5%

10%

15%

20%

25%

30%

35%

1000 1600 1820 1913 1973

China

India

19980%

5%

10%

15%

20%

25%

30%

35%

1000 1600 1820 1913 1973

China

India

1998



Globalisation:The Difference

China Vs IndiaContribution to GDP Growth by Consumption, Investment and Net Exports:

China Vs India

China India

1994-00 2000-05 1994-01 2001-07

Final consumptio

n expenditure 63.2 37.6 75.2 67.2

Gross capital

formation 29.9 54.4 26.3 36.4

Net exports 6.9 7.9 -1.5 -3.6

Total 100.0 100.0 100.0 100.0Source: Computed from WDI and CSO data.High growth driven by domestic investment, consumption and net exports in China, while the contribution by net exports negative in India

A To-Be Superpower India’s rank in GDP

604 929 1,411

3,174

7,854

2004 2015 42010 202525 2035Brazil Italy Japann

Real GDP,(US$ billion)

Economies overtaken

BRICs assumes India GDP growth of ~8% p.a.

11 96

4

3

France, GermanyUK



Conclusion

THE WAY FORWARD

• Infrastructure

• Education

• Business climate

• Public expenditure efficiency


THANK YOU

GROUP MEMBERS: Aditya Akshita

Jatinder Singh Khushboo

Ruchika Shubha Tanesh

Uma

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