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The Indian Economy A brief analysis by John Birchall.

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Presentation on theme: "The Indian Economy A brief analysis by John Birchall."— Presentation transcript:

1 The Indian Economy A brief analysis by John Birchall

2 India - an overview Over 1000 million people Divided into 59 economic centres highest number of IT literate people at post undergraduate level in the world major force in engineering has own space programme has own nuclear programme

3 An overview - 2 Poverty reduction remains major target Per capital GNI $450 per annum. Poverty and illiteracy closely linked, especially amongst women 34% of young population remain malnourished 4 - 5 million HIV/Aids cases

4 India - its people Population 1 billion + annual growth 1.8% fertility rate 3.1 infant mortality per 1000 live births = 70 mortality of those under 5 per 1000 live births = 88 Malnutrition prevalence of children under 5 = 45% 30% of people live in urban centres Illiteracy rates - males = 31%, females = 54%

5 India - a case of steady progress GDP growth since 1981 is 5.8%, highest amongst large countries outside East Asia Removed strategy of protectionism and growth began to increase Opening-up of markets has seen agriculture grow by 3.3% p.a. during 1990’s major reason for decline in poverty 70% of poor live in rural areas

6 India - a case of steady progress - 2 40% of nations poor live in north and east of country re-focus of agriculture - end of subsidies and open markets being encouraged distortions in agriculture within States The poorest States have high debt ratios Central government has problems with public sector pay awards 34% of population still live in poverty = 300 million

7 India - progress 3 30 million children still do not attend school women still not fully engaged in political, legal and economic systems success of women only banks and micro loans Compare with Indonesia - on a par in 1960, now has 80% literacy and <20% below poverty much still dependent on ‘good’ harvest - problems arise when food supply poor

8 India progress - 4 Large Central government fiscal debt is a worry approximately 2% of GDP total Central government debt is 9.6% of GDP This raise external worries regarding fiscal discipline and macro management to cut deficit Central government has raised taxes In contrast to fiscal situation trade is encouraging

9 India progress - 5 Current deficit down to 1% of GDP but exports have slipped as world markets began to tighten tariff reform will ease problems as will expenditure on infrastructure Reform of public- sector dominated financial sector being asked for government debt takes up 40% of bank deposits private sector crowded out?

10 India progress - 6 Privatisation beginning - power thought to be first candidate will reduce public sector debt and interest rate pressure good governance now a major aim De-regulation continuing in agriculture to assist in increasing international competitiveness but much remains to be done

11 The environment 3.3 million sq km = India! 640 of which are covered in forest.1% reduction in forests each year Proportion of population with improved access to water =88% Those with access to improved sanitation = 77% Energy use per capita ( equivalent of kg of oil) = 485 Electricity use per capita (kwh) 347.3

12 The economy GNI total $ 473 billion per capita GNI $460 GDP growth 4.5 p.a. Inflation 6.1% p.a. Agriculture value added as percentage of GDP = 24.5% Industry value added = 27.1% Services value added = 48.4% Exports of goods and services as % GDP=13.6% Imports as % GDP = 16.5% Gross Capital formation as %GDP = 13%

13 The economy - 2 Trade in Goods as share of GDP 21% Net barter terms of trade 108 Foreign Direct Investment US$ Net = 2.3 billion Total Debt service ( % of exports) = 12.5% Short-term debt outstanding = 3.5 billion$ Aid per capita(US$) 1.5 Overall budget deficit = 5.4% of GDP

14 Technology and Infrastructure Telephones(fixed and mobile) per 1000 people = 35.5 Personal Computers per 1000 people = 4.5 Internet users 5 million Paved Roads as % of total 20.3% Aircraft departures 198.5 thousand CO2 emissions(metric tons per capita) 1.1

15 Figures not available for Net secondary attendance Girls in secondary education Net primary school attendance Disability prevalence in both rural and urban areas Prevalence of HIV/Aids in rural and urban areas

16 Major trade - exports Gems and ornamental items 16.5 Engineering 12.9 Textiles 12.8 Garments 12.1 Chemicals 8.0 Leather goods 5.8 Iron Ore 1.7



19 Health and Social Statistics Registered Medical practitioner per 10,000 = 5.5 Beds per 10,000 = 9.3 Proportion of population dependent on agriculture 78% Birth rate per 1000 26.1, death rate per 1000 8.7%

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