Business Environment Swot Analysis of Indian Economy

8/13/2019 Business Environment Swot Analysis of Indian Economy

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SWOT ANALYSIS OF INDIAN

ECONOMYBUSINESS ENVIRONMENT


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INTRODUCTION

India is the 10th largest economy in world in

terms of GDP 3rd largest by PPP.

Population: 1.22 billion

Yearly increase: 18 million

Major group: 50% - 025 years

More than 1.53 billion people by the end of 2030.

Average life expectancy: 68.6 years Economic growth rate slowed to around 5.3% for

the 201213 fiscal year.


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STRENGTH

Agriculture

High percentage of cultivable land 56.78%

Huge English speaking population

Availability of skilled manpower

Extensive Higher Education

Diversified nature of the economy System

Third largest reservoir of engineers

High growth rate of economy

Rapid growth of IT and BPO sector brining valuableforeign exchange

Abundance of natural resources


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Weakness

Rural poverty leads horrible wave of suicides by indebtedfarmersPresence of Vast Industrial sicknessIn rural India, about 34 percent of the population lives on

less than $1.25 a dayCoal Mines CorruptionIllegal allotment and Kick BacksInequality in prevailing socio economic conditionsPoor infrastructural facilitiesHuge population leading to scarcity of resources

Low literacy rateUnequal distribution of wealthRural urban divide, leading to inequality of highstandards


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Opportunities

Scope for entry of private firms in various sectors forbusiness

Inflow of Foreign Direct Investment

Huge foreign exchange earnings

Area of biotechnology Area of Infrastructure

Huge Domestic Market

Huge agricultural resources, fishing, plantation crops,livestock

Investment in R & D, engineering design Huge population of India in foreign countries . Vast forest area and diverse wildlife


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CONCLUSION

Indian economy is robust in nature

Banking & credit system have been able to

survive the down turn.

Youth of INDIA

Economists predict that India economy will

be the third largest by 2025 after USA &China


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Overview of the 11th Five

Year Plan (2007 - 2012)

As per syllabus


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Income & Poverty

Accelerate growth rate of GDP from 8% to 10%and then maintain at 10% in the 12th Plan inorder to double per capita income by 2016-17.

Increase agricultural GDP growth rate to 4% peryear.

Reduce educated unemployment to below 5%. Raise real wage rate of unskilled workers by 20

percent. 11th Five Year Plan Target


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Education

Reduce dropout rates of children from elementary school from52.2% in 2003-04 to 20% by 2011-12.

Increase literacy rate for persons of age 7 years or more to 85%. Lower gender gap in literacy to 10 percentage points. Increase the percentage of each cohort going to higher education

from the present 10% to 15% by the end of the 11th Plan. Provide clean drinking water for all by 2009 and ensure that thereare no slip-backs by the end of the 11th Plan.

Reduce malnutrition among children of age group 0-3 to half itspresent level.

Reduce anemia among women and girls by 50% by the end of the

11th Plan.


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Health

Ensure that at least 33 percent of thedirect and indirect beneficiaries of allgovernment schemes are women and girl

children.

Ensure that all children enjoy a safechildhood, without any compulsion to work

Women and Children


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Infrastructure

Ensure electricity connection to all villages and BPL households by2009 and round-the-clock power by the end of the Plan.

Ensure all-weather road connection to all habitation with population1000 and above (500 in hilly and tribal areas) by 2009, and ensurecoverage of all significant habitation by 2015.

Connect every village by telephone by November 2007 and providebroadband connectivity to all villages by 2012.

Provide homestead sites to all by 2012 and step up the pace ofhouse construction for rural poor to cover all the poor by 2016-17.

Increase forest and tree cover by 5 percentage points. Attain WHO standards of air quality in all major cities by 2011-12.

Treat all urban waste water by 2011-12 to clean river waters. Increase energy efficiency by 20 percentage points by 2016-17 Environment


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Conclusion

Economic Planning help in mobilizing andallocating the resources in desired manner.

Objective of economic planning is to reduce

inequality, economic growth, balanced regionalgrowth, modernization.

Each five year plan aims at achieving certaintarget. Five year plan constitute the steps towardthe fulfillment of objectives of economicplanning.


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Overview of the 12th Five

Year Plan (2012 - 2017)


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Twelfth Plan Strategy

There are Short Term and Medium TermChallenges

Short Term : Reverse the current growth

slowdown :5.5 percent in 2012-13,Aim for 6.5 to 7 percent in 2013-14

Longer Term : Get back to high growth. Thisrequires accelerating from 5.5% in 2012-13 toover 9% in last two years

This is very difficult, especially given the globalsituation


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Growth must not only be rapid, butalso more inclusive

Inclusiveness is a multi-dimensional concept :

Reduce poverty

Improve regional equality across states and

within statesImprove conditions for SCs, STs, OBCs,Minorities

Generate attractive employment opportunities

for youthClose gender gaps

Twelfth Plan lists 25 monitorable indicators


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25 Monitorable Targets, e.g.

Average GDP Growth of 8 percent

Agriculture Growth of 4 percent

Reducing head-count poverty by 10 percentage point

Generating 50 million work opportunities

Eliminating gender and social gap in education

Reducing IMR to 25, MMR to 100 and TFR to 2.1

Enhance infrastructure investment to 9% of GDP

Achieve universal road connectivity and access to powerfor all villages

Access to banking services for 90 percent households

Major welfare benefits and subsidies via Aadhaar


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Strategy for AchievingInclusiveness

There are two routes to inclusivenessthrough higher growth which expands income and employmentopportunities

through government pro-poor programmes which target poorergroups

Both are important. Twelfth Plan combines the pro-poorprogramme approach with efforts to get a growth patternwhich is faster and inherently more inclusive

Two routes are mutually reinforcing

High growth generates more revenues, to finance inclusivenessprogrammes

Many inclusiveness programmes (health and education)contribute to growth


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Macro-Economic Challenges inAchieving High Growth

Must increase the rate of investment, especially ininfrastructure

Domestic savings must increase even more to reduce theinvestment saving gap which is necessary to keep theCurrent Account Deficit under control

Government dis-savings must be eliminated. This meansfiscal deficit must be reduced

Growth of subsidies has to be contained 75% of the investment in the economy is private

investment (household plus corporate) Both the Centre and the States have to create an eco-system that encourages private investment

Infrastructure, especially quality of power, and availabilityof skills is critical


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Effectiveness of Plan Programmes

Twelfth Plan sets ambitious targets for FlagshipProgrammes in areas of Health, Education, Ruralinfrastructure, Livelihood Development etc.

Too much focus on the level of expenditure in theseprogrammes. Not enough on effectiveness in terms ofend results

Implementation in the field is the responsibility of StateGovernment agencies. However, programme guidelinesare set by the Central Government

There are demands for greater flexibility from states. We

are responding as follows :Guidelines are being made more flexible to meet therequirements of individual States10% flexi-fund within each scheme for innovations


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Energy

8 percent GDP growth requires 6 percent growth inenergy supply from all sources

Our fossil fuel resources are limited, and our importdependence is already high

Enhanced Energy Efficiency in all sectors We need to push push for renewable Energy: Wind, Solarand Storage Hydro

Difficult Policy Issues:Coal vs. Forest Cover

Petroleum Price DistortionsNatural Gas Exploration FrameworkAll Energy Prices: Coal, Petroleum product, Natural Gas andElectric power are currently under priced. Fuel adjustment isneeded


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Water

Management of water resource is a major challenge.Estimates of water availability have been optimistic

Twelfth Plan proposes modified AIBP and expandedWatershed Management Programme

Water sector needs better Regulatory FrameworkNew Groundwater Law

Water Regulatory Authorities in each state

National Water Framework Law

Agriculture accounts for 80% of water use at present,must shift to more water efficient agriculture practices

Manage urban and industrial water demand through waterrecycling and rationalise user charges


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Alternative Scenarios

12th Plan goal of 8% inclusive growth is not aforegone conclusion

Depends on difficult policy decisions to be taken

by Centre and States For the first time Plan presents three scenarios Strong Inclusive Growth 8%

Insufficient Action 6 to 6.5%

Policy logjam 5 to 5.5% Anything much less than 8% will not satisfy

aspirations of the people

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Business Environment Swot Analysis of Indian Economy

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