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Indian Economy

2004-2018
Introduction
• The economy of India is a developing mixed economy. It is the world's
seventh-largest economy by nominal GDP and the third-largest by
purchasing power parity (PPP).
• Current GDP:
$2.848 trillion (nominal; 2018)
$10.385 trillion (PPP; 2018)
• India’s average economic growth rose to 7.7 per cent in the 10-year
regime of the UPA Government compared with 6.2 per cent recorded
in the previous decade.
Highlights of Report Card: 10 Years of
Progress and Growth
• Education –
• India has achieved "near universal education" at the primary school
level due to Right to Education and the dropout rates have also
decreased.
• Central universities increased from 17 to 44 during 2004-13.
• Agriculture-
• Minimum support prices (MSP) for wheat and paddy has been doubled
since 2004, while MSP for other grains have increased three fold.
• More than 650 lakh farmers were financed by the banking system during
2012-13.
• The new Land Acquisition Act
• Rural employment-
• The Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA) is the largest welfare scheme of its kind in the
world started in 2006.
• Wages given under the scheme per day have almost doubled
from Rs.65 to Rs. 128 since the launch of the scheme.
• In 2012-13, the scheme provided employment to over 4.98
crore households, generating more than 213 crore person-days
of employment.
• Infrastructure –
• More than 2 lakh km of new roads have been added to the rural road
network. Allocation for Pradhan Mantri Gram Sadak Yojana has
increased by 88 percent in the 12 th Five Year Plan.

• Economic growth –
• Per capita income in India has grown three fold since UPA came to
power. The average GDP growth during the period of UPA
government has been 7.7 percent despite two global slowdowns.
GDP GROWTH RATE GRAPH
PER CAPITA INCOME GRAPH
Impact of Recession:
1) Economic growth faltered: According to Central Statistics Office (CSO)
India’s GDP growth rate faltered below 5% during second of 2012, which was
lowest economic growth that India had achieved in last decade.

2) Exports stagnated: With demand in developed countries drying up owing


to prolong recession, India’s export industry was badly hit. Especially the IT,
Textile and Jewelry sector’s export, which catered to large international
market, came under severe stress.

3) Industrial output dropped: Recessionary period caused a huge drop in


growth of India’s industrial output. Owing to lowering of demand and several
other adverse economic factors that were brought upon by economic
recession.
4) Balance sheet of Indian corporate sector came under severe stress: The
Indian corporate sector started feeling pinch of high interest rates in the
market. Especially real estate, consumer durables and auto sector, which are
overtly dependent on low interest rates to spur demand, had to face
stressful time.

5) Job market became stagnant: With balance sheet of most big corporate
companies under severe stress, the job market took the toll. While many big
and medium sized companies become hesitant in hiring job aspirants, job
cuts became new norm among India’s corporate sector.

6) The bull run in stock market came to end: Before 2007, Indian stock
market witnessed impressive bull run that saw huge inflow of capital from
foreign institutional investors. Many big Indian corporate also raised huge
amount capital through initial public offering (IPO). But this was not
sustained as effects of economic recession started becoming visible
throughout the economy.
2014-2018
Major Accomplishments:
• The government has also pushed for greater liberalization of India’s
foreign direct investment (FDI) regime leading to a record average
inflow of $52.2 billion in FDI annually in the last four years.
• The creation of Aadhar and Pradhan Mantri Jan Dhan Yojana (PMJDY)
• New integrated transportation initiative for roads, railways, waterways and
civil aviation.
• UDAN (Ude Desh ka Aam Naagrik) regional connectivity scheme with fares
starting at about Rs2,500.
AGRICULTURE SECTOR
• New crop insurance scheme and higher funding for irrigation to
counter weather risks.
• Set an ambitious goal to double farm incomes in real terms by 2022,
moving away from the historical focus on increasing production.
• Initiated a range of marketing reforms to create a “one nation, one
market” in agriculture.
GREEN ECONOMY AND ENERGY
• Push for electric vehicles
• Clean and renewable energy generation gets a boost
MINDSET CHANGE
• Swachh Bharat Abhiyan launched to eliminate open defecation and
promote cleanliness.
• Cashless economy.
• Unified Payments Interface (UPI)—a payment system that allows mobile-
enabled money transfers between bank accounts. Promotion of the Bharat
Interface for Money (BHIM) for a less-cash economy.
• Improving e-infrastructure, e-participation and government e-services for
addressing transparency.
• Doing away with the red beacon—a symbol of so-called VIP culture—from
all government vehicles.
• Introducing the Beti Bachao Beti Padhao (save the girl child, educate the
girl child) scheme.
Drawbacks
• Jobs have been major failure of this Government. It promised 2 crores
jobs per year and the economy hardly able to generate few lakhs jobs.
Todays Times of India has a story about 738 peons job had attracted
over 2.81 lakh applicants many of them are MBAs and PHDs.
Rural economy graph
Inflation graph
FDI inflow
Investment graph
Rise in ease
Demonitisation
India has marched on the path of digital transactions at a much faster
pace.
Key points describing success of demonetisation are:
Rate of Inflation goes down
• Prices of commonly consumed commodities like Pulses, fruits,
vegetables had gone down substantially post demonetization.
India moves to cashless economy
• One of the key effects of Demonetization 2016 has been that more
people have made digital payments part of their lives moving towards
a cashless economy.
Stock Market gets bullish
After demonetization stock market in
India got bullish. While BSE index which
was 27, 459 on November 7, 2016 rose
to 33680.92 on November 6, 2017, the
NSE rose from 8497 to 10,443.

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