-Syndicate 11
Deepshikha
Kirti
Rehna
Mahima
Anukta
Anant
Arun
Ashutosh
Pradeep Doot
Introduction
Economy from 1991-1995
Economy from 1996-2000
Economy from 2001-2005
Economy from 2006-2009
Conclusion
1947-1991-
-Social democratic-based policies
-Extensive regulation,
-Protectionism,
-Public ownership,
Since 1991 - Continuing economic liberalisation
- market-based system.
2000s – Revived economic reforms and better policy
- Accelerated economic growth rate.
2008 - World’s second-fastest growing major economy.
2009 - Significant slowdown in India's official GDP
growth rate to 6.1%as well as the
- Return of a large projected fiscal deficit of 10.3%
of GDP
From 1950 to 1990- economy was at its best in 1980's.
But even then there were structural imbalances
In 1991
exports Rs. 32,553 crores
imports Rs. 43,196 crores
Foreign exchange reserves Rs. 5,541 crores
• Some of the major steps taken were:
- Indian Industry : unshackled from unnecessary
bureaucratic and governmental control.
- licensing policy was abolished
- Confidence of the creditors was restored ,the fear of
default was dispelled.
- exchange rate adjusted in July 1991 to a new level
deemed credible.
- Export subsidies were abolished,
- fertiliser subsidy was reduced and defence expenditure
was restrained.
- Monetary policy tightened -to control inflationary
pressure
- foreign investment : restricted to attract foreign
investment especially in priority areas
including critical infrastructure sectors such as power.
- Structural reforms to enhance productivity
- Strengthening of competition in the industrial
sector.
- The consumer has a wide variety of goods,
particularly consumer durables to choose among
competing products at fairly competitive prices.
- Promoting an employment oriented pattern of
industrialization.
- Was a decade of scarce resources both
domestically and externally.
Controls and procedures were revised.
Number of state controlled industries:
before 1990 – 18
under new policy - 9
Only including industries of national importance
(military weapons, energy, environment, health etc).
Dis-investment of government equity from public
sector, enterprises, reduced from 51% to 26%
quantitative restrictions were reduced on imports
Phased reduction of import tariff.
Globalisation also meant an explosion of financial
integration in world markets.
• Growth rate 7.5% in 1991–2000
• Business services (information
technology, information technology enabled
services, business process outsourcing) were
among the fastest growing sectors contributing
to one third of the total output of services in
2000
• Nearly 10% of the population were unemployed
and the overall unemployment rate was 7.3%,
with rural areas doing marginally better (7.2%)
than urban areas (7.7%). India's labour force is
growing by 2.5% annually, but employment only
at 2.3% a year.
During this period the economy grew at an average rate
of 6.4% per year
Poverty fell from 36 percent in 1993-94 to 26 percent or
less
The cumulative F.D.I in flows since 1991 increased to $
26.89 billion Rs.1,03,636 crores, while approvals were
at $ 72.98 billion - Rs. 2,67,798 crores till August 2001
While foreign investment, as a percentage of GDP was
almost zero in 1990-91 and 0.1% in 1991-92, its average
during 1992-2000 was 1.2 %
For the year 2000, in respect of current competitiveness
index India's rank was 37 out of 58 countries, in respect
of Growth competitiveness index (GCI) India was in the
49th position out of 59 countries, in respect of Emerging
Market Index India's rank at 46
VARIABLE 1993-94 1999-2000
1. Total employment 375 Million 397 Million
2. Unemployment rate
as measured on the
basis of current daily 6% 7.3 %
status C.D.S
3. Rate of growth of 2% 1%
employment per (1983-93- (93-94-99-
annum 94) 2K)
4. Number of employed
workers in the
agriculture sector in
Millions 242 238
• The Indian economy has moved to a higher
growth trajectory, with growth in GDP at market
prices exceeding 8 % in every year
• import quotas were removed (fully only in 2001)
•currency was devalued
• the foreign investment regime was liberalised, and various
restrictions on external financial transactions were eased.
•Some of these reforms helped Indian business; others put
enormous competitive pressure on them.
•India’s economic performance in the post-reforms period has many positive
features. The average growth rate in the ten year period from 1992-93 to
2001-02 was around 6.0 percent
•The economy grew at an impressive 6.7 percent in the first five years
after the reforms, it slowed down to 5.4 percent in the next five years
• The slowdown is due not to the effects of reforms, but rather to the
failure to implement the reforms effectively
•According to the revised inflow figures, FDI was US$ 6.13 billion in
2001-02; US$ 5.04 billion in 2002-03; US$ 4.67 billion in 2003-04 and
US$ 5.54 billion in 2004-05.
Manufacturing
Growth of manufacturing from 3.3 % during the 9th Five Year Plan to 8.6 %
during the 10th Five Year Plan.
Services
The growth in the services sector continued to be broad based. Among the
sub-sectors of services, “transport and communication” has been the fastest
growing with growth averaging 15.3 % per annum during the Tenth Five Year
Plan period followed by “construction”.
Agricultural growth
The coefficient of variation (CV) for the 10th Five Year Plan was, however,
higher than the 60 year average.
Savings and investment
The average investment ratio for the 10th Five Year Plan at 31.4 % was higher than
that for the 9th Five Year Plan, while the average saving rate was also 31.4 % of
GDP higher than the average ratio of 23.6 % during the 9th Plan.
Employment and poverty reduction:
The ratio of persons below the poverty line declined from around 36 % of the population
in1993-94 to 28 %in 2004-05 as per the uniform recall period. Based on the mixed
recall period, the ratio declined to 22 % in 2004-05 from 26 % in 1999-2000
• 12th largest by nominal value
• 4th largest by purchasing power parity(ppp)
• Emerging economic power with vast human
and natural resources & a huge knowledge
base
# However In 2009
1. Slow down in GDP-6.1%
2. Return of large projected fiscal deficit-
10.3% of GDP
1. Agriculture:
-2nd world wide in farm output
-16.6% of GDP
-employed 60% 0f work force
2. Industry and services:
-27.6% of GDP
-Employed 17% 0f work force
-16th in the world in nominal factory output
-15th in service output
-Employed 23% work force
-55% in GDP
3. Banking and Finance:
-bank branches increased to 98910
-population covered by each branch is 15000
-public sector banks holds 75% where as private
and foreign holds 18.2% and 6.5% respectively.
Liberalized policy allows up to 100% stake in
ventures
Reforms :
Reduced industrial licensing
Removed restrictions on expansion
Easy access to foreign technology
Income and consumption
Economic inequality
Recession
Inflation
