GROWTH STORY OF INDIAN ECONOMY SINCE 1947

BY :-YUGANT

AGENDA

IntroductionMajor CausesRole Of Manmohan SinghMajor economic reformsSignificant ConsequencesVarious Sectors AffectedConclusion

INTRODUCTION

The term ‘economic reforms’ refers to policy reforms undertaken by the central govt. since 1947 to attain certain significant achievements through the main approaches which are as follows:StabilizationRestructuringGlobalization

ROLE OF MANMOHAN SINGHWide ranging tax reformsContainment of defence equipmentCuts in fertilizersInward oriented trade policy Exchange rate devalued

MAJOR ECONOMIC REFORMS

Fiscal Reforms:Reducing the Fiscal DeficitBanking SectorImport LicensingExport Orientation

Tax ReformsDirect TaxIndirect TaxResource Generation through Divestment

Structural Economic ReformsReorientation of Planning

BANKING REFORMS

Changing in rate SLR and CRREntry of Public and Private Sector in capital marketOperational FlexibilityRelaxation in Licensing of Private BankImprove standard of supervision , audit and technologyInterest rate deregulation and financial repression.

INDUSTRIAL REFORM

Industrial licensingForeign TechnologyMRTP limitTechnological DevelopmentDevelopment of small scale industriesRight of LaborForeign InvestmentSelf reliance

THE NEXT GENERATION REFORMS

Political Reforms for Good GovernanceRe-engineering the Role of the governmentAdministrative and Legal ReformsStrategic Management of the Economy with a focus on knowledgebaseFiscal PrudenceAgricultural Sector ReformsIndustrial RestructuringLabour Sector ReformsForeign Trade and Outward Investment PoliciesFinancial Sector Reforms

SIGNIFICANT CONSEQUENCES

Higher rate of growthRapid growth of secondary and tertiary SectorsIncrease in Export and ImportsImproved Balance of PaymentsRise in value of Rupee Less reliance on foreign borrowingsOverall development of Indian economy

VARIOUS SECTORS AFFECTED

GROWTH RATE

90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00

5.6

1.3

5.1

5.9

7.3 7.37.8

4.8

6.56.1

Growth Rate

SECTOR WISE GROWTH

RATE

90-91 91-92 92-93 93-94 94-95 95-96 96-97 97-98 98-99 99-00

4.6

-1.1

5.4

3.9

5.3

-0.3

8.8

-1.5

5.9

0.600000000000001

7.4

-1

4.3

5.6

10.3

12.3

7.7

3.8 3.8

4.94.9

2.5

5.6

7.1

10.4

13.3

7.8 7.8 7.78.5

7.7

12

5.9

13.4

5.6

8.2

7

11.6

7.4

10.6

4.1

2.6

4.6

3.5 3.2

7.9

6.3

11.7

10.4

12.2

Agriculture Forestry & Fishing ManfacturingConstruction Electricity Trade Hotels Transport Services

INDICATORS OF EXTERNAL SECTOR

YearGrowth of Exports-

BOP(%)Growth of

Imports-BOP(%)

Exports/ imports

(%)

90-91 9 14.4 66.2

95-96 20.3 21.6 74

00-01 21.1 4.6 78.5

2005-2006 23.4 32 67

BALANCE OF PAYMENT

90-91 95-96 00-01 2005-2006

-100000

-50000

0

50000

100000

150000

200000

ExportsImportsTrade Balance

Am

ount

in U

S $

Mill

ion

WPI INFLATION RATE

Primary aarticaes Power Fuel Light Lubricants

Manf. Products All comodities0

2

4

6

8

10

12

14

11.3 11.3

10.110.6

5.4

13

3.1

5.1

3.6

8.1

3.9

4.7

Series1 1991-1996 1996-2001 2001-2006

FOREIGN EXCHANGE RESERVES

Year Gold Foreign Currancy

80-81 370 585090-91 3496 2236

2000-2001 2725 39554

MACRO ECONOMIC INDICATORS

Indicators 1989-90 1994-95 1999-00 2000-01 2001-02 2002-03 A. Growth of GDP (%) 5.6 6.3 6.1 4.4 5.6 4.4

B. GDP Growth by Sectors (%):            

i. Agriculture & Allied 2.7 4.9 0.3 -0.4 5.7 -3.1ii. Industry, of Which

Manufacturing 6.7 8.3 4 7.3 3.4 6.1iii. Services 6.7 6 10.1 5.6 6.8 7.1

C. Inflation Rate (WPI Index (%)) 9.1 10.4 4.8 2.5 5.2 3.2

D. Current Account Balance as % of GDP -3.1 -1.1 -0.5 -0.5 na  

E. Foreign Exchange Reserves (US $ Bn.) 3.37 19.65 35.06 39.55 51.05 69.89

F. Exchange Rates (Rs/US $) 16.6 31.4 43.33 45.51 47.69 48.44

G. Rate of Growth of :            i. Exports (%) 18.9 18.4 10.8 21 -1.6 20.4

ii. Imports (%) 8.8 22.9 17.2 1.7 1.7 14.5

iii. Exports as % of GDP 6.4 9.6 9.1 10.4 9.9  

iv. Imports as % of GDP 9.3 10.5 12.4 11.8 11.6 na

H. Fiscal Deficit as % of GDP 7.9 4.7 5.4 5.6 5.9 5.5

I. Revenue Deficit as % of GDP 2.6 3.1 3.5 4.1 4.2 3.9

J. Saving Ratio as % GDP 22.3 24.9 24.1 23.4 24 na

K. Investment as % of GDP 24.9 25.4 25.2 24 23.7 na

C.R.R

1970-80 1980-90 1990-00 2000-100

2

4

6

8

10

12

CRR

BANK RATE

1950-60 1960-70 1970-80 1980-90 1990-00 2000-100

2

4

6

8

10

12

bankrate

CONCLUSIONReforms have put the Indian economy on a higher growth path.Equally important to resolve the immediate liquidity problem.To restore the economy on the path of rapid and healthy economic growth.

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