HS 201

introducing

Economic Growth & Poverty

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Features of

Indian Economy

Low Per Capita Income Low Standard of Living High Poverty Inequal Income Distribution Dominance of Agriculture Existence of Rich Resources Inadequate Capital Formation Unemployment and Underemployment Technological Backwardness Infrastructural Inadequacies 4/14/12 Dualistic Economy

Click to edit Master text styles Second level Third level Fourth level Fifth level

GDP Growth 2000 - 2012

GDP Growth during 20002012

SOURCE : WWW.

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Economic sectors

1 2 3
Finance
Industries Agriculture
These are the main factors dominating Indian Economy
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Finance Sector

Involves money exchange

Finance Sector
Prime MinisterIndira Gandhinationalised14 banks in 1969, followed by six others in 1980

Since then, the number of bank branches has increased from 10,120 in 1969 to 1,15,910 in 2008

Currently, India has 88 scheduled commercial banks (SCBs) 28 public sector banks, 29 private banks and 31 foreign bank

They have a combined network of over 53,000 branches and 17,000ATMs

The public sector banks hold over 75% of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively

The BSE Sensex is generally regarded as the most popular and 4/14/12 precisebarometerof the Indian stock markets

Industrial Sector

Involves the mobilization of assets in terms of products and services

Industrial Sector
Industry accounts for 27.6% of the GDP and employ 17% of the total workforce
o

one-third of the industrial labour force is engaged in simplehousehold manufacturing

o

Indiais 16thin the world in terms of nominal factory output

Textilemanufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output
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Tirupurhas gained universal recognition as the leading source of hosiery, knitted garments, casual wear and sportswear
o

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Agricultural Sector

It covers the SOURCE and MAINSTAY of Indian Economy

Agricultural Sector

Agriculture is the mainstay of the Indian economy

It is the means of livelihood of almost two thirds of the work force in the country

Agriculture accounts for approx 18% of India's GDP Largest producer in the world ofmilk,cashew nuts,coconuts,tea,ginger,turmericandblack pepper World's largestcattlepopulation

Second largest producer of wheat,rice,sugar,groundnutand inlandfish

Third largest producer oftobacco

India accounts for 10% of the world fruit production with first rank 4/14/12 in the production ofbananaandsapota

Quote Unquote -about Economic Growth

India is now truly a land of opportunity. India has evolved into one of the world's leading technology centers. By 2032, India will be among the three largest economies in the world.
BRIC Report, Goldman Sachs

John Redwood Economic Competitiveness Policy Group, UK

Craig Barrett Intel Corporation

I have never seen India so dynamic, vibrant and full of business opportunities.
Peter Loescher President and Chief Executive Siemens

We came to India for the costs, stayed for the quality and are now investing for innovation.
Dan Scheinman, Cisco System Inc. as told to Business Week, August 2005
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India is a developed country as far as intellectual capital is concerned.

The Indian market has two core advantages - an increasing presence of multinationals and an upswing in the IT exports. India is a very exciting market and the luxury car segment is growing exponentiallyPaul de Voijs Mr here.
Managing Director Volvo Car India Travyn Rhall, ACNielse n

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Jack Welch General Electric

12

Some

Encouraging Statistics

India is the second fastest growing major economy with a 9.2% increase in GDP per year India is already the third largest economy in the world at PPP India has seen a huge amount of foreign direct investment in the country, totaling 67.72 billion dollars and is said to be one of the preferred options for FDI Indias poverty level is decreasing by 10% annually Indian companies have gone on a buying rampage, with Tata Steel acquiring Corus, Mittal buying Arcelor and Tata looking set to buy Jaguar and Land Rover from Ford. Every year Indias middle class is increased by 40,000,000 new members which shows that the wealth is truly entering society The Bombay Stock Exchanges value has been consistently rising, currently worth 1.61 trillion dollars, the largest in South East Asia. Unemployment has dropped by 2% annually, and illiteracy and mortality rates have also been falling, indicating that India is not only growing but developing too. 4/14/12

Is India

Really Shining?
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Poverty

345 Million Indians live under the poverty line. This means that one in three Indians live on less than twenty rupees per day. 7.2% of all Indians are unemployed India comes in at 94th in terms of employment. Using the GINI coefficient which is the only reliable method of calculating inequality India scores 0.368 were 0 is perfect equality and 1 is perfect inequality, putting India in the bottom 50 of all ranked nations in the world.
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What is

POVERTY ? Poverty is hunger.

Poverty has no shelter. Poverty is being sick and not able to see a Doctor. Poverty is Powerlessness Poverty is not having access to clean water. Poverty is surviving one day at a time. Poverty is not having the security of job.

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Poverty Statistics

According to a text styles Click to edit Master recent Indian government committee constituted to estimate poverty, Second level of Indias population (380 million) is nearly 38% Third level report is based on new methodology poor. This and level Fourththe figure is 10% higher than the present poverty estimate of 28.5%. Fifth level Since 1972 poverty has been defined on basis of the money required to buy food worth 2100 calories in urban areas and 2400 calories in rural areas. In June this year a government committee headed by NC Saxena estimated 50% Indians were poor as against Planning Commissions 2006 figure of 28.5%.

Reasons for POVERTY

a)

Poor Infrastructure Balance of Payments deterioration High Levels of Debt Large Budget Deficit Rigid Labour Laws

a)

a)

a)

a) 4/14/12

Agriculture is still the biggest employer in India, with 54% of the Population engaged in Farming. 43 % of all Indian land is used in agriculture, but it only contributes 18% of the nations GDP Many farmers are subsistence farmers. According to the WHO, 61% of all farmers cultivate less than 0.4 hectares only enough to feed their own family, with little left over to sell. 4/14/12

Agricultural Prices fluctuate wildly and often farmers are forced into debt, produced by extortionist interest rates which are unregulated by the government. They enter cycles of debt so the money they earn is never their own. Pressed by either famine and no crops, or a bumper crop and collapsing prices, farmers are often driven to suicide. Since 1997 when the statistics were first recorded 25,000 farmers have taken their lives in India. In the Vidarbha District of Maharashtra 1920 farmers killed themselves between January and August of 2007. 4/14/12

This woman is looking for her brother who left a suicide note at her house, they cannot find his body. In one district of Maharashtra alone, a farmer kills himself every eight hours.

Healthcare: Our Fundamental Right Our life expectancy is 68 years, making our life expectancy the 139nth out of 172 countries. A growing threat: 5.7 million Indians have AIDS or HIV out of which 40 % are women We only one hospital bed for every 74 patients who need one. We have only one doctor for every 1,230 people. Despite these statistics, the Indian Government still spends more on defence than it does on health.

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Our literacy rate is 61% making us the 145th in the World, just above war-torn Sudan and just below genocidal Rwanda. Literacy is defined as The ability to sign ones name so complete literacy is likely to be even less.

Guns are more important than books: 2.9% of GDP is spend on defence compared to 2.6% on education. Is it guns or education that will really make India shine?

Educatio n
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So the question still remains, is India really having a the QUESTION So

Economic Growth or it is hiding the poverty reality??? the

TRUTH is :

Even after more than 50 years of Independence India still has the world's largest number of poor people in a single country. Of its nearly 1 billion inhabitants, an estimated 260.3 million are below the poverty line, of which 193.2 million are in the rural areas and 67.1 million are in urban areas. More than 75% of poor people reside in villages. Poverty level is not uniform across India. The poverty level is below 10% in states like Delhi, Goa, and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). It is between 30-40% in Northeastern states of Assam, Tripura, and Mehgalaya and in Southern states of TamilNadu and Uttar Pradesh.
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The Gradual Approach It is based on the belief that the growth of industry is going to begin by expansion of other sectors rather deliberate expansion of the Industrial Sector by the Government.

Approach for Economic Balance

The Big Push Approach It is based on the game race; where certain minimum Investment, Purchasing Power or Market Size (push) is necessary.

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v v

Tea m
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Lokesh Chandra Basu Anshul Garg

Computer Science and Engineering Indian Institute of Technology, Roorkee

WhatsYou! Thank Your Message?

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