DEVELOPMENT OF INDIAN ECONOMY

INTRODUCTION

India is today one of the six fastest growing economies of the world.

The country ranked fourth in terms of Purchasing Power Parity (PPP) in 2001.

The business and regulatory environment is evolving and moving towards constant improvement.

A highly talented, skilled and English-speaking human resource base forms its backbone.

CONT…….

Agriculture, services and manufacturing industries play a vital role in the development of the Indian economy.

Economic development in India still depends on the various sectors that constitute the Indian economy-

- Agriculture,

-Manufacturing industries

- Service industries.

MEANING OF ECONOMY DEVELOEMENT

Economic development means economic growth along with the desired changes in the distribution of national income an other technical and institutional changes.

It means increase in the efficiency of the factors of production, better techniques of production, positive changes in attitude towards work and life increase in the importance of non-agriculture sectors and so on.

HISTORY OF INDIAN ECONOMY The history of Indian economy can be broadly

divided into three phases:

1. Pre- Colonial

2. Colonial

3. Post Colonial

COMPARISON B/W INDIA & CHINA ECONOMY

Facts INDIA CHINA

GDP Around $1.209 trillion

Around $7.8 trillion

GDP growth 6.7% 9.1%

Per capital GDP $1016 $6,100

Inflation 7..8% -1.2%

Labor force 523.5 million 807.7 million

Unemployment 6.8% 4.3%

POVERTYa) It is a situation in which a person is unable to get

minimum basic necessities of life, i.e.. food, clothing and shelter for his or her living.

b) As per records of National Planning Commission, 36% of the Indian population was living Below Poverty Line in 1993-94.

c) Though this figure has decreased in recent times but some major steps are needed to be taken to eliminate poverty from India.

UNEMPLOYEMENT

a) A situation in which a section of people, who are able and willing to work but do not find gainful work .

b) The increasing population is pressing hard on economic resources as well as job opportunities.

c) Indian government has started various schemes such as Jawahar Rozgar Yojna, and Self Employment Scheme for Educated Unemployed Youth (SEEUY). But these are proving to be a drop in an ocean.

POPULATION EXPLOSION

This monster is eating up

into the success of India. According to 2001 census of India, population of

India in 2001 was 1,028,610,328, growing at a rate of 2.11% approx.

Such a vast population puts lots of stress on economic infrastructure of the nation.

Thus India has to control its burgeoning population.

RURAL URBAN DIVIDE

 It is said that India lies in villages, even today when there is lots of talk going about migration to cities, 70% of the Indian population still lives in villages.

There is a very stark difference in pace of rural and urban growth. Unless there isn't a balanced development Indian economy cannot grow.

OVERCOME OF CHALLENGES Orientation of public expenditure such as on

health and education sectors. Introduction of reforms in labor laws to

generate more employment opportunities. Introduction of new technology. Reducing agriculture's dependence on

monsoon by developing means of irrigation. Introduction of financial reforms including

privatization of some public sector banks.

AGRICULTURE

Two thirds of India 's population lives in rural areas.

Agriculture and related activities are the main source of livelihood for them.

Helping the country achieve a surplus in the food grains production.

With liberalization of trade in agricultural commodities, India enjoys a competitive advantage in a number of agricultural and processed food products exports.

Agriculture sector contributes 17.5% in GDP.

MANUFACTURING

The manufacturing sector contributes around one -fourth of total GDP.

Companies in the manufacturing sector have consolidated around their area of core competence by tying up with foreign companies to acquire new technologies, management expertise and access to foreign markets.

The cost benefits associated with manufacturing in India , have positioned India as a preferred destination for manufacturing and sourcing for global markets.

SERVICES

The services sector currently accounts for 62.6%, almost half of the country's GDP.

Expanding at the rate of 8-10 per cent per annum, services is the fastest growing sector in the Indian economy.

Availability of highly skilled workers has encouraged many international companies to carry out their research and development activities in India.

INFRASTRUCTURE

The infrastructure sector in India , traditionally reserved for the government, is progressively being opened up for private sector participation.

It constitutes factors like:-

- Ports

- Roads

- Airports

- Power

TELECOMMUNICATIONS India 's telecommunications network ranks among

the top ten countries in the world. One of the world's largest and fastest growing

telecom markets, the country has an investment potential estimated at US$ 69 billion by 2010.

Despite a strong base of a billion people, the country has a low telephone density of approximately 5 per cent, estimated to grow to 15 per cent by 2010.

FINANCIAL SECTORS The Indian financial sector reforms aim at

improving the productivity and efficiency of the economy.

The opening of the Indian financial market to foreign and private Indian players, has resulted in increased competition ,better product offerings.

Banks and trade financiers have also played an important role in promoting foreign trade of the country.

ECONOMIC PROSPECTS FOR 2010

The India’s national income statistics shows the growth of 6.5 per cent in 2010

The food grain production in 2010 is likely to be 216.9 million tonne.

The overall effect of the shortfall in agriculture production would likely to seen on the economic growth by nearly 2 per cent, as the sector accounts for more than 18 per cent of the total GDP.

In the FY2010-11, agriculture would contribute by more than 17.6 per cent to the Indian Economy on the expectations of strong output of Rabi Crop

possibility of high interest rates, large fiscal deficit, high inflation, in 2010 but it still believes that the Indian economy would grow by 8.5 per cent in 2010-11.

Nearly 10 per cent in 2011-12 by taking higher agricultural productivity, industrial and demand for higher exports .

The Service industry would grow by more than 8.7 per cent

India’s Economic Outlook Projection

2007 2008 2009 2010

GDP Growth

9.40% 7.30% 5.40% 7.20%

CPI 6.4% 9.3% 5.50% 4.90%

Recent announcement of IIP data, which shows the 16 per cent growth over the last year’s data

Strong output of natural gas, iron ore, and other prominent minerals 

Output of crude oil ,coal and  Construction related cement has continued to show slackening growth

CONCLUSION

India will reach 8% Growth Rate in next 5 years

Economy will grow to between 10 – 12% between 2010 – 2015

Economists predict that by 2020, India will be among the leading economies of the world.

QUOTE: “We can be a developed Nation by 2020 if we

make this our Mission Statement” – Dr A P J Abdul Kalam, Indian

President

Will India fulfil the President’s Statement?