India has experienced strong economic growth in recent decades: - GDP growth averaged 6.3% from 1981-1988 and 4.8% from 1988-2006, outpacing population growth. - Poverty has declined significantly, with the poverty ratio falling from 52.2% in 1951-52 to 27.5% in 2004-05. - Exports have doubled or more than doubled in various sectors including merchandise, services, software in recent years, and the exports to GDP ratio has increased substantially.

1. India: An Emerging Giant
Arvind Panagariya
Columbia University
September 24, 2007

4. GDP and Population Growth
7
6.3
6
5 4.8
4.1
4
GDP Growth
3.2
Population Growth
3
2.3
2 2.1
1.9
2
1
0
1951-65 1965-81 1981-88 1988-06

5. Poverty Ratio: 1951-62
70.00
60.00
-0.002x
y = 52.167e
50.00
Poverty Ratio
40.00
30.00
20.00
10.00
0.00
1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60 1960-61
Year

6. Poverty Ratio: 1963-74
70.00
0.0134x
60.00 y = 50.562e
50.00
Poverty Ratio
40.00
30.00
20.00
10.00
0.00
1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1972-73 1973-74
Year

7. Poverty ratio
60
50
40
30
20
10
0
1973-74 1977-78 1983 1987-88 1993-94 1999-00

8. Focusing on the recent Years
GDP Growth: Business cycle effect or a shift in the growth rate?
10.0
9.0 8.6
8.0
7.1
7.0
6.0
5.2
5.0
4.0
4.0
3.0
2.0
1.0
0.0
1990-93 1993-97 1997-03 2003-07

9. GDP in current dollars ($billion): 16.8 percent Annual growth During 2003-06
900
800 806
700 696
600 601
500 506
461 478
452
400
300
200
100
0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

10. Merchandise exports have doubled in three years ($billion--current)
120.0
102.7
100.0
79.2
80.0
63.8
60.0 52.7
36.8
40.0
18.1
20.0
0.0
1990-91 1999-00 2002-03 2003-04 2004-05 2005-06
P

11. Services exports have more than doubled in two years ($billion--current)
70.0
60.6
60.0
50.0 46.0
40.0
30.0 26.9
20.0 16.3
10.0
4.6
0.0
1990-91 2000-01 2003-04 2004-05 2005-06

12. Exports (goods+services) to GDP ratio
25.0
20.5
20.0
15.6
15.0
11.6
10.0
7.2
5.0
0.0
1990-91 1999-00 2002-03 2005-06

13. 19
0.0
5.0
10.0
15.0
20.0
25.0
90
1 9 -9 1
91
1 9 -9 2
92
1 9 -9 3
93
1 9 -9 4
94
1 9 -9 5
95
1 9 -9 6
96
1 9 -9 7
97
1 9 -9 8
98
1 9 -9 9
99
2 0 -0 0
00
2 0 -0 1
01
2 0 -0 2
02
2 0 -0 3
03
2 0 -0 4
0
2 0 4 -0
05 5
-0
6P
TOTAL foreign investment has picked up though not DFI ($billion)
DFI
Total

14. Remittances have coninued to rise rapidly
($billion--current)
30
25
20
15
10
5
0
1990- 1991- 1992- 1993- 1994- 1995- 1999- 2000- 2001- 2002- 2003- 2004- 2005-
91 92 93 94 95 96 00 01 02 03 04 05 06

15. Software exports have doubled in two years ($billion--current)
25.0 23.6
20.0
17.2
15.0
12.8
10.0
6.2
5.0
0.8
0.0
1995-96 2000-01 2003-04 2004-05 2005-06

16. Phone Lines in Million
250.00
200.00
150.00
100.00
50.00
0.00
1991 July 31 2005 July 31 2006 28-Feb-07

17. 1.80
1.60
1.40
1.20
1.00
Passenger vehicles (million)
Passenger cars (million)
0.80
0.60
0.40
0.20
0.00
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07