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FACTS OF INDIAN ECONOMY

India economy, the 9th largest economy in the world

As predicted by Goldman Sachs, the Global Investment

Bank, by 2035 India would be the third largest economyof the world just after US and China

India has to pass through many phases before it canachieve the current milestone of 9% GDP

In doing so, india has to face many challenges and major10 of them is listed as-

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MAJOR CHALLENGES

1. Improve Governance

2. Raise Basic Education Achievement

3. Increase Quality & Quantity of Universities

4. Control Inflation

5. Introduce a Credible Fiscal Policy

6. Liberalize Financial Markets

7. Increase Trade With Neighbours

8. Increase Agricultural Productivity

9. Improve Infrastructure

10.Improve Environmental Quality purpose

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IMPROVE GOVERNANCE

Indias governance problems overarch all its other

problems.

Without better governance, delivery systems and effective

implementation

India will find it difficult to educate its citizens, buildinfrastructure, increase agricultural productivity, and

ensure that the fruits of economic growth are well-

distributed

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RAISE BASIC EDUCATIONAL ACHIVEMENT

Many international observers tend to see education as one

of Indias biggest advantages.

It is the case that India has a large number of highly

educated people.

There is evidence that the amount of time spent receiving

secondary education is important for economic growth

and productivity. The actual amount spent on education is low, and its

efficiency is weak

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INCREASE QUALITY & QUANTITY OF

UNIVERSITIES

There is also significant need for better higher education.

The National Knowledge Commission has proposed an

increase in the number of universities from 350 today to

1,500 by 2016.

It has also proposed an increase in the 18-24 age group

to be educated to university level from 7% to 15%.

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INFLATION CONTROL

Although India has not suffered particularly from dramaticinflation, it is currently experiencing a rise in inflation similar tothat seen in a number of emerging economies

With economic growth of 9.2 % inflationary pressure is likely toincrease

Govt. and RBI fails in attempt to curb inflation as it remains in

double digits for more than 8 months

Effects of which can be seen by stagnant increase in Intrest rate inpast 1 year, which hamper the growth of industries and realtysector.

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INTRODUCE A CREDIBLE FISCAL POLICY

Indias gross fiscal deficit remains one of the highest in

the world and, recently, government liabilities have been

increasing at an alarming rate.

At such high levels, government borrowing crowds out

private-sector credit, keeps interest rates high, adds to

already high government debt, and becomes a key sourceof macro vulnerability.

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LIBERLISE FINANCIAL MARKETS

Indias financial sector remains small and

underdeveloped.

The state still dominates the sector, holding 70% of

banking assets, a majority of insurance funds and the

entire pension sector.

markets are lacking in corporate debt, currency andderivatives.

This leads to a lack of credit and low financial savings

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INCREASE TRADE WITH NEIGHBOURS

Indian trade with the rest of the world has ballooned.

Indias trade with China is rising sharply, and China now ties

with the US as Indias biggest trading partner.

India takes just 1.93% of Chinas exports and provides just

1.46% of its imports

Bangladesh is on the verge of giving India as Most Favoured

Nation which in turn going to help its trade with neighbors.

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INCREASE AGRICULTURAL PRODUCTIVITY

Indias agricultural yields are a fraction of those of itsmore dynamic Asian neighbours.

Increasing agricultural growth is critical not only for Indiato sustain high growth rates, but also to move millions outof poverty.

Currently, 60% of the labour force is employed in

agriculture, which contributes less than 1% of overallgrowth.

Need to introduce modern technologies and moreinvestment in improving Agricultural productivity and

also contribution to Indian GDP

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IMPROVE INFRASTRUCTURE

Indias constraints in infrastructure are obvious to first-time visitorsor long-term residents.

The problems of clogged airports, poor roads, inadequate power,delays in ports have been well-recognised as impeding growth.

Incremental demand for infrastructure will continue to increase dueto economic growth and urbanisation

Over 40% of Indian fruit rots before it reaches the market; this isone example of the supply constraints and inefficiencys facing theIndian economy

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IMPROVE ENVIRONMENTAL QUALITY

Indias high population density, extreme climate and

economic dependence on its natural resource base make

environmental sustainability critical in maintaining itsdevelopment path.

India is well-placed to deal with environmental issues.

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THANK YOURUTUJA

MAHAKUND

IBSAR