present scenario of indian economics 2012

7/30/2019 Present Scenario of Indian Economics 2012

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Presented by :

Namrata Maniyar

Tejal Agrawal

Saudamini Kale

Monu Burrewar

Loveleen Oberoi

Khusbu Chaturmohta

Prajakta Gadhikar


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INTRODUCTION TO INDIANECONOMY:

Since the last two decades Indian economy is ona rise.

India is one of the fastest growing economiesand is often considered as one of the majorsuper powers.

The Indian economy has continuously recordedhigh growth rates and has become an attractivedestination for investments,


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Today India is among the most attractivedestinations globally, for investments and businessand FDI had increased over the last few years.

India is the second most preferred destination for

foreign investors, according to the report 'DoingBusiness in India' by Ernst & Young.

The report explores India's key sectors, investmentclimate, funding scenario, laws and regulations, to

aid companies that are doing, or plan to dobusiness in India.


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India has emerged as the world's top recipient ofofficially recorded remittances for the fourth straightyear.

India is expected to receive US$ 58 billion this year,followed by China, and Mexico, as per the latest issueof the World Bank's Migration and Development Brief.


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India's economic growth is expected to remainrobust in 2012 and 2013

India's GDP growth in 2012-13 is expected to be7.6 per cent

Industrial growth pegged at 4-5 percent,expected to improve as economic growth picks

up pace. Foreign trade to remain a key driver of growth.

OVERVIEW OF THE ECONOMY


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INFLATION

The CPI inflation rate in India was last reported at5.3 percent in January of 2012

The Wholesale Price Index (WPI) based Inflation

rate was at 6.95% in Feb 2012 and is expected totouch 6.5 to 7 percent by Apri 2012.

Indian inflation may further moderate during2012/13 due to the earlier tightening of monetarypolicy and other fiscal measures.

WPI food inflation dropped from 20.2% inFebruary 2010 to 1.6% in January 2012


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FISCAL DEFICIT

According to the budget, India's fiscal deficit will be5.1% of GDP in fiscal 2012-2013

compared with 5.9% of GDP in the current fiscal year

(2011-2012).

Both metrics fall short of the 13th financial commission'sfiscal consolidationtargets of 4.2% of GDP in the comingfiscal year and 4.8% of GDP in the current fiscal year.

The ratios are also lower than the government's targetsin its five-year plan of 4.1% in fiscal 2012-2013 and 4.6% infiscal 2011-2012.
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REPO RATE The RBI had raised the short-term lending (repo)

rate 13 times between October 2010 andSeptember 2011 in its bid to fight inflation. In all,the repo rate was increased by 3.75 percentagepoints.

The Reserve Bank of India (RBI) held the repo ratesteady at 8.5 per cent


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POLITICAL ISSUES

No strong reforms

FDI retail affected

Without price hikefiscal deficit at same position

Political pressures

RBI cannot do much because of fiscal slippagewhich is inflationary

difficult to function freely

cannot carry on reforms


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Indian Sector Analysis:

Indian Economy VS Industry:

Industrial activities accounts for 20% of the

economy

14% of the total workforce is engaged inmanufacturing activities

Industrial growth pegged at 4-5% in FY 12


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GROWTH

Growth rate of various sectors in Q3 2011


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Share of various sectors


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Agriculture :

Though agricultural activities employ 52% of thetotal work force yet it contributes only 17.5% tothe total GDP.

Agriculture grew at 2.5% Vs target of 4% in five yrplan.

Agriculture, allied activities account for 13.9 % of

GDP in FY 12


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Service Sector :

Services sector proves savior during global crisis

Services grow by 9.4% despite slowing GDP

growth

Share of services in GDP at increased from 55.1%in FY 11 to 56.3% in FY 12


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Trade : Indias exports grew at 23.5%

UAE Indias largest trading partner, followed by

China

Imports up 29.4% - April 2011Jan 2012


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Banking and Finance

India has one the largest network of bankbranches

India has a robust banking economy which wasproved by the fact that it remained largelyunaffected by the global recessions.

Public sector banks show 19 % growth in prioritysector lending


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Financial Market :

Global situation, rising trade imbalance, pace ofreform initiatives to boost capital flows

Domestic growth concerns likely to influencefinancial markets movements


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Rupee & Exchange rates :

Rupee fallen by 12.4 % against USD

Rupee falls from 44.97 per USD in March 2011 to

51.34 per USD in January 2012

Current exchange rate as on 16th March 2012:50.4032 per Dollar


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Tax rates ( budget 2012) :

Upto Rs 2 lakhNil

Rs 2-5 lakh - 10%

Rs 510 lakh20%

Above Rs 10 lakh30%

Standard excise duty hiked to 12%

Service tax up from 10% to 12%


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present scenario of indian economics 2012

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