2. CONTENT
DEFINITIONS
FIVE YEAR PLANS
STATESTICS
OVERVIEW: INDIAN ECONOMY TODAY
SECTORS
EXTERNAL TRADE AND INVESTMENT
EXPORTS
IMPORTS
FOREIGN DIRECT INVESTMENT (FDI)
CURRENCY
3. DEFINITIONS
'Gross Domestic Product - GDP' The monetary value of
all the finished goods and services produced within a
country's borders in a specific time period, though GDP is
usually calculated on an annual basis.
The concept of ‘Purchasing Power Parity – PPP’ allows
one to estimate what the exchange rate between two
currencies would have to be in order for the exchange to
be at par with the purchasing power of the two countries'
currencies.
4. First Plan (1951-1956)
The total planned budget of Rs.2069 crore (2378 crore later)
irrigation and energy (27.2%), agriculture and community
development (17.4%), transport and communications (24%),
industry (8.4%), social services (16.64%), land rehabilitation
(4.1%), other sectors and services (2.5%).
The target growth rate was 2.1% annual gross domestic product
(GDP) growth; the achieved growth rate was 3.6%
5. Second Plan (1956-1961)
The total amount allocated under the Second Five-Year Plan in
India was Rs.48 billion
The plan attempted to determine the optimal allocation of
investment between productive sectors in order to maximize
long-run economic growth
Hydroelectric power projects and five steel plants at Bhilai,
Durgapur, and Rourkela were established
The target growth rate was 4.5% and the actual growth rate was
4.27%
6. Third Plan (1961–1966)
Sino-IndianWar of 1962
In 1965–1966, India fought aWar with Pakistan
There was also a severe drought in 1965
The war led to inflation and the priority was shifted to
price stabilization
Many cement and fertilizer plants were also built
The target growth rate was 5.6%, but the actual growth
rate was 2.4%
7. Fourth Plan (1969–1974)
The Indira Gandhi government nationalized 14 major Indian
banks and the Green Revolution in India advanced agriculture
Indo-Pakistan War of 1971 and Bangladesh Liberation War
took funds earmarked for industrial development
India also performed the Smiling Buddha underground nuclear
test in 1974
The target growth rate was 5.6%, but the actual growth rate
was 3.3%
8. Fifth Plan (1974–1979)
The Fifth Five-Year Plan laid stress on employment,
poverty alleviation
The plan also focused on self-reliance in agricultural
production and defense
The target growth rate was 4.4% and the actual growth
rate was 5.0%
9. Sixth Plan (1980–1985)
The Sixth Five-Year Plan marked the beginning of
economic liberalization
Price controls were eliminated and ration shops were
closed. This led to an increase in food prices and an
increase in the cost of living
The target growth rate was 5.2% and the actual growth
rate was 5.4%
10. Seventh Plan (1985–1990)
Seventh Plan was focused on achieving the prerequisites
of self-sustaining growth by the year 2000
The target growth rate was 5.0% and the actual growth
rate was 6.01%
11. Eighth Plan (1992–1997)
In 1991, India faced a crisis in foreign exchange (forex)
reserves, left with reserves of only about US$1 billion
At that time Dr. Manmohan Singh (former Prime Minister of
India) launched India's free market reforms that brought the
nearly bankrupt nation back from the edge
It was the beginning of privatization and liberalization in India.
An average annual growth rate of 6.78% against the target
5.6% was achieved.
12. Ninth Plan (1997-2002)
The Ninth Five-Year Plan tried primarily to use the latent
and unexplored economic potential of the country to
promote economic and social growth
The Ninth Five-Year Plan achieved a GDP growth rate of
5.4% against a target of 6.5%
13. Tenth Plan (2002–2007)
The main objectives of the Tenth Five-Year Plan were:
Attain 8% GDP growth per year.
Reduction of poverty rate by 5% by 2007.
Providing gainful and high-quality employment at least to
the addition to the labor force.
Reduction in gender gaps in literacy and wage rates by at
least 50% by 2007.
Target growth: 8.1% - growth achieved: 7.7%
14. Eleventh Plan (2007-2012)
Rapid and inclusive growth.(Poverty reduction)
Emphasis on social sector and delivery of service therein.
Empowerment through education and skill development.
Reduction of gender inequality.
Environmental sustainability.
To increase the growth rate in agriculture, industry and
services to 4%,10% and 9%
respectively.
Reduce Total Fertility Rate to 2.1
Provide clean drinking water for all by 2009.
15. Twelfth Plan (2012–2017)
The Twelfth Five-Year Plan of the Government of India
has decided for the growth rate at 8.2%
The government intends to reduce poverty by 10% during
the 12th Five-Year Plan
17. STATESTICS: GDP BY SECTORS
Nominal GDP sector composition
Agriculture
17%
Industies
26%
Services
57%
18. STATESTICS: GDP (Nominal)
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
GDP (Millions of US$)
United States
China
Japan
Germany
France
United Kingdom
Brazil
Russia
Italy
India
Canada
Australia
21. 1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2012-13 Nominal GDP IN
Crores of Rupees
2012-13 GDP Per Capita IN
Crores of Rupees
22.
23. STATESTICS: GDP (PPP)
18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
2,000.00
0.00
United
States
GDP (Billions of US$)
China India Japan Germany
United States
China
India
Japan
Germany
24. OVERVIEW: INDIAN ECONOMY TODAY
The economy of India is the tenth-largest in the world
by nominal GDP and the third-largest by purchasing
power parity (PPP)
One of the G-20 Major Economies
A Member of BRICS
The 19th-Largest Merchandise and the 6th Largest
Services Exporter in the World in 2013
25. Labour force 487.3 million
Labour force by occupation agriculture: 49%, industries:
20%, services: 31% (2012 est.)
Unemployment 3% Urban, 2% Rural, 10.8 million Total
Average gross salary $1.46 per hour ($3,036.8 yearly in
2010);[14]
Main industries agriculture, petroleum, products, chemicals,
pharmaceuticals, software, textiles, steel, transportation
equipment, machinery, cement, mining, construction
Ease-of-doing business rank 134th
26. SECTORS
Agriculture
• India ranks second worldwide in farm output
• Agriculture and allied sectors like forestry, logging and fishing
accounted for 17% of the GDP
• employed 51% of the total workforce in 2012
• India is the largest producer in the world of milk, jute and pulses
• the second largest producer of rice, wheat, sugarcane, cotton and
groundnuts
• the second largest fruit and vegetable producer, accounting for 10.9%
and 8.6% of the world fruit and vegetable production respectively
• India is also the second largest producer and the largest consumer of
silk in the world
• exports Basmati rice, wheat, cereals, spices, fresh fruits, dry fruits,
buffalo beef meat, cotton, tea, coffee and other cash crops particularly
to the Middle East, Southeast and East Asian countries
27. SECTORS……continued.
Industry
• Industry accounts for 26% of GDP and employs 22% of the
total workforce
• Petroleum products and chemicals are a major contributor to
India's industrial GDP, and together they contribute over 34% of
its export earnings
• India produced about 8 per cent of global pharmaceutical supply
in 2011 by value
• India is the 12th largest producer and 7th largest consumer of
machine tools in the world
• Textile industry contributes about 4 per cent to the country’s
GDP
• India's mining industry was the 4th largest producer of minerals
in the world by volume, and 8th largest producer by value
28. SECTORS……continued.
Services
• India's services sector has the largest share in the
GDP, accounting for 57% in 2012
• The services sector provides employment to 27%
of the work force
• The share of the Indian IT industry in the
country's GDP increased from 4.8% in 2005–06 to
7% in 2008
29. Energy and power
• India is the fourth largest producer of electricity and oil
products and the fourth largest importer of coal and
crude-oil in the world
• Coal and oil together account for 66% of the energy
consumption of India
• India's oil reserves meet 25% of the country's domestic oil
demand
• India had an installed power generation capacity of
233.929 GW as of December 2013, of which thermal
power contributed 68.31%, hydroelectricity 17.05%, other
sources of renewable energy 12.59%, and nuclear power
2.04%
30. Infrastructure
• India's infrastructure and transport sector contributes
about 5% of its GDP
• India has the world's second largest road network in
quantitative terms
• more than 4.3 million kilometers
• 74 people out of 100 have land or wireless telephones in
India
• Internet use has been growing rapidly in India, with an
estimated 243 million users in June 2014
31. Retail
• Retail industry contributes between 14–15% to 20% of
India's GDP
• The Indian retail market is estimated to be US$450 billion
and one of the top five retail markets in the world by
economic value
• In 2012 government permitted 51% FDI in multi brand
retail and 100% FDI in single brand retail
• India is one of the fastest-growing retail market in the
world, and is projected to reach $1.3 trillion by 2020
32. Tourism
• The combined international and domestic tourism
contributed 5.92% of India's GDP, and 9.3% to its
employment in 2011
• India attracted 6.85 million international tourist
arrivals and $18.4 billion in foreign exchange
earnings from tourism receipts in 2013
33. Banking and finance
• Prime Minister Indira Gandhi nationalized 14 banks in
1969, followed by six others in 1980
• it mandatory for banks to provide 40% of their net credit to
priority sectors like agriculture, small-scale industry, retail
trade, small businesses, etc
34. External Trade and Investment
Global Trade Relations
Since liberalization, the value of India's international trade
has increased sharply, with the contribution of total trade
in goods and services to the GDP rising from 16% in
1990–91 to 47% in 2008–10.
India is a founding-member of General Agreement on
Tariffs and Trade (GATT) since 1947 and its successor, the
WTO
Exports: $442.4 billion: total (2012)
Imports: $616.7 billion: total (2012)
37. European Union,
16.80%
United States,
12.80%
Singapore,
4.70%
China, 5.10%
United Arab
Emirates,
10.80%
Others, 2.07%
Exports
38. STASTICS: IMPORTS
$488.6 billion: merchandize imports,
$128.1 billion: services imports,
$616.7 billion: total (2012)
IMPORTS:-
crude oil, gold and precious stones, electronics,
engineering goods, chemicals, plastics, coal and ores, iron
and steel, vegetable oil and other commodities
39.
40. China, 11.10%
European Union,
11.10%
Switzerland,
Saudi Arabia,
6.70%
United Arab
4.90%
Emirates, 7.70%
IMPORTS
Others, 1%
41. External Trade and Investment
Foreign Direct Investment
Foreign investment was introduced in 1991 under Foreign
Exchange Management Act (FEMA)
100 percent FDI allowed in single brand retail; 49 percent
through automatic
FDI cap in telecom is100 percent
49 percent FDI limit in civil aviation
FDI cap in defense production is at 26 percent
FDI limit in insurance sector is 49 percent
FDI up to 49 percent in petroleum refining
In power exchanges 49 percent FDI allowed
42. %age of Total FDI Inflows
Mauritius,
36.68%
Singapore,
France, 1.82%
Germany, 2.99%
Cyprus, 3.47%
Netherlands,
Japan, 7.34%
5.03%
U.S.A,
5.59%
United Kingdom, 10.91%
9.78%
UAE, 1.25%
Switzerland,
1.22%
Mauritius
Singapore
United Kingdom
Japan
U.S.A
Netherlands
Cyprus
Germany
France
UAE
Switzerland
Others
43. CURRENCY
The Indian rupee is the only legal tender in India,
The rupee is divided into 100 paise.
The highest-denomination banknote is the 1,000 note;
the lowest-denomination coin in circulation is the 50 paise
coin; with effect from 30 June 2011 all denominations
below 50 paise have ceased to be legal currency
India's monetary system is managed by the Reserve Bank
of India (RBI), the country's central bank. Established on
1 April 1935 and nationalized in 1949
44. 70
60
50
40
30
20
10
0
US Dollar Exchange Rate in Rs.
