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Story of India
Indias position on the global stage as a vibrant democracy and an economic
powerhouse is now a well-established fact. The role of Asian economies over the past few
years has only reinforced the strength and importance of India on the global center stage.
China and India pushed demand even as large economies continued to shrink (read European
nations) or just about find its feet like the US economy. Indian markets held on even as the
economy battled against the global pressures of recession and showdown. Exports fell
sharply in the first half and the rupee remained volatile as it fought hard to find its new level.
The tide has turned and India is on a bounce back thanks to its resilient business houses,
industrious entrepreneurs and innovative workforce who have fought hard showing their
capacity to treat every challenge as a new opportunity.
Indian growth that had dipped to 5% is likely to be arrested to this level in this
financial year even as green shoots are appearing to take the growth story on the recovery
path in 2014. The government has shown conviction in its policies and has worked towards
opening up the economy with greater liberalization in several areas that have now attracted
investments from foreign investors across the globe. While opening up foreign direct
investments in multibrand retail has already seen some action with majors like Tesco and
Wal-Mart planning to set up stores in India. Further Indias decision to open up the aviation
sector, a key infrastructure sector, has already seen three big investment proposals over a few


As India moved on in search of energy security, companies like government owned
ONGC and private majors like Reliance Industries and the Essar group to name a few
invested in new oil fields and gas discoveries. Steel majors like Jindals and Essar too made
their mark.
Indias journey on the global stage is a story of emerging economies that are set to
change the rules of the game in this century. The changing dynamics of the economic order
that has made the world flat today will give an opportunity to show Indias strength as an
economic and knowledge power even as it basks in its rich historical heritage.


Economy of India
The economy of India is the tenth-largest in the world by nominal GDP and the third-
largest by purchasing power parity (PPP). The country is one of the G-20 major economies, a
member of BRICS and a developing economy that is among the top 20 global traders
according to the WTO. India was the 19th-largest merchandise and the 6th largest services
exporter in the world in 2013; it imported a total of $616.7 billion worth of merchandise and
services in 2013, as the 12th-largest merchandise and 7th largest services importer. India's
economic growth slowed to 4.7% for the 201314 fiscal year, in contrast to higher economic
growth rates in 2000s. IMF projects India's GDP to grow at 5.4% over 2014-15. Agriculture
sector is the largest employer in India's economy but contributes a declining share of its GDP
(13.7% in 2012-13). Its manufacturing industry has held a constant share of its economic
contribution, while the fastest-growing part of the economy has been its services sector -
which includes construction, telecom, software and information technologies, infrastructure,
tourism, education, health care, travel, trade, banking and others components of its economy.
The post independence-era Indian economy (from 1947 to 1991) was a mixed
economy with an inward-looking, centrally planned, interventionist policies and import-
substituting economic model that failed to take advantage of the post-war expansion of trade
and that nationalized many sectors of its economy. India's share of global trade fell from
1.3% in 1953 to 0.5% in 1983.[33] This model contributed to widespread inefficiencies and
corruption, and it was poorly implemented.
After a fiscal crisis in 1991, India has increasingly adopted free-market principles and
liberalized its economy to international trade. These reforms were started by former Finance
minister Manmohan Singh under the Prime Minister ship of P.V.Narasimha Rao. They
eliminated much of License Raj, a pre- and post-British era mechanism of strict government

controls on setting up new industry. Following these economic reforms, and a strong focus on
developing national infrastructure such as the Golden Quadrilateral project by former Prime
Minister Atal Bihari Vajpayee, the country's economic growth progressed at a rapid pace,
with relatively large increases in per-capita incomes. The south western state of Maharashtra
contributes the highest towards India's GDP among all states, while Bihar is among its
poorest states in terms of GNI per capita. Mumbai is known as the trade and financial capital
of India.


SWOT Analysis on India as a Power house:
This comprehensive study of SWOT Analysis profile of Indian energy Limited provides you
with an in-depth strategic analysis and operation. This will give you a clear and unbiased
view of the Indias key strength and weaknesess and also the potential opportunities and the
threats to the Indian economy.
India is the 10
largest economy in world in terms of GDP 3
largest by PPP.
Population: 1.22 billion
Yearly increase: 18 million
Major group: 50% - 0 25 years
More than 1.53 billion people by the end of 2030.
Average life expectancy: 68.6 years
Economic growth rate slowed to around 5.3% for the 201213 fiscal year.


The Strengths are:
High percentage of cultivable land 56.78%
Huge English speaking population
Availability of skilled manpower
Extensive Higher Education
Diversified nature of the economy System
Third largest reservoir of engineers
High growth rate of economy
Rapid growth of IT and BPO sector brining valuable foreign exchange
Abundance of natural resources.
A large pool of skilled workers (go to 'labor' link)
A rapidly growing middle class with a strong desire to consume.
A rich natural resource base, especially coal, iron ore, water, limestone and granite.


The weaknesses are:
Very High percentage of workforce involved in agriculture which involves only
17.2% of GDP.
Rural poverty leads horrible wave of suicides by indebted farmers.
In rural India, about 34 percent of the population lives on less than $1.25 a day.
Coal Mines Corruption Illegal allotment and Kick Backs.
Inequality in prevailing socio economic conditions.
Poor infrastructural facilities.
Huge population leading to scarcity of resources.
Low literacy rate.
Unequal distribution of wealth.
Rural urban divide, leading to inequality of high standards.
Lack of Capital
Lack of adequate infrastructure
Bureaucracy and corruption
Scope for entry of private firms in various sectors for business.
Inflow of Foreign Direct Investment.
Huge foreign exchange earnings.
Area of biotechnology.
Area of Infrastructure.
Huge Domestic Market.
Huge natural gas deposits found in India.
Huge agricultural resources, fishing, plantation crops, livestock.
Investment in R & D, engineering design.

Huge population of India in foreign countries.
Vast forest area and diverse wildlife.
Global economy recession/slowdown
High fiscal deficit
Volatility in crude oil prices across the world
Growing Import bill -$461.4 billion
Population explosion, rate of growth of population still high
Inflation: 6.87 per cent in July of 2012
Agriculture excessively dependent on monsoons.

With this I can conclude that Indian economy is robust in nature. Its Banking
& credit system have been able to survive the down turn. We have a strong and
dynamic Youth of INDIA. Therefore Economists predict that India economy will be
the third largest by 2025 after USA & China.


Problems Facing by Indian Economy
Since 1991, the Indian economy has pursued free market liberalisation, greater openness in
trade and increase investment in infrastructure. This helped the Indian economy to achieve a
rapid rate of economic growth and economic development. However, the economy still faces
various problems and challenges.
1. Inflation:
Fuelled by rising wages, property prices and food prices inflation in India is an
increasing problem. Inflation is currently between 8-10%. This inflation has
been a problem despite periods of economic slowdown. For example in late
2013, Indian inflation reached 11%, despite growth falling to 4.8%. This
suggests that inflation is not just due to excess demand, but is also related to
cost push inflationary factors. For example, supply constraints in agriculture
have caused rising food prices. This causes inflation and is also a major factor
reducing living standards of the poor who are sensitive to food prices. The
Central Bank of India have made reducing inflation a top priority and have
been willing to raise interest rates, but cost push inflation is more difficult to
solve and it may cause a fall in growth as they try to reduce inflation.
2. Poor educational standards
Although India has benefited from a high % of English speakers. (Important
for call centre industry) there are still high levels of illiteracy amongst the
population. It is worse in rural areas and amongst women. Over 50% of Indian
women are illiterate. This limits economic development and a more skilled

3. Poor Infrastructure
Many Indians lack basic amenities lack access to running water. Indian public
services are creaking under the strain of bureaucracy and inefficiency. Over
40% of Indian fruit rots before it reaches the market; this is one example of the
supply constraints and inefficiencys facing the Indian economy.
4. Balance of Payments deterioration.
Although India has built up large amounts of foreign currency reserves the
high rates of economic growth have been at the cost of a persistent current
account deficit. In late 2012, the current account reached a peak of 6% of
GDP. Since then there has been an improvement in the current account. But,
the Indian economy has seen imports growth faster than exports. This means
India needs to attract capital flows to finance the deficit. Also, the large deficit
caused the depreciation in the Rupee between 2012 and 2014. Whilst the
deficit remains, there is always the fear of a further devaluation in the Rupee.
There is a need to rebalance the economy and improve competitiveness of


5. High levels of private debt
Buoyed by a property boom the amount of lending in India has grown by 30%
in the past year. However there are concerns about the risk of such loans. If
they are dependent on rising property prices it could be problematic.
Furthermore if inflation increases further it may force the RBI to increase
interest rates. If interest rates rise substantially it will leave those indebted
facing rising interest payments and potentially reducing consumer spending in
the future
6. Inequality has risen rather than decreased.
It is hoped that economic growth would help drag the Indian poor above the
poverty line. However so far economic growth has been highly uneven
benefiting the skilled and wealthy disproportionately. Many of Indias rural
poor are yet to receive any tangible benefit from the Indias economic growth.
More than 78 million homes do not have electricity. 33% (268million) of the
population live on less than $1 per day. Furthermore with the spread of
television in Indian villages the poor are increasingly aware of the disparity
between rich and poor.


7. Large Budget Deficit
India has one of the largest budget deficits in the developing world. Excluding
subsidies it amounts to nearly 8% of GDP. Although it is fallen a little in the
past year. It still allows little scope for increasing investment in public services
like health and education.
8. Rigid labour Laws
As an example Firms employing more than 100 people cannot fire workers
without government permission. The effect of this is to discourage firms from
expanding to over 100 people. It also discourages foreign investment. Trades
Unions have an important political power base and governments often shy
away from tackling potentially politically sensitive labour laws.
9. Inefficient agriculture
Agriculture produces 17.4% of economic output but, over 51% of the work
force are employed in agriculture. This is the most inefficient sector of the
economy and reform has proved slow.
10. Slowdown in growth
2013/14 has seen a slowdown in the rate of economic growth to 4-5%. Real
GDP per capita growth is even lower. This is a cause for concern as India
needs a high growth rate to see rising living standards, lower unemployment
and encouraging investment. India has fallen behind China, which is a
comparable developing economy



Future Aspect
India to Overtake China as Biggest Economic Powerhouse by 2030: India will
overtake Chinas as the world's largest economy, surging ahead of Western and
European nations by 2030, said a US intelligence report released on Monday.
The US National Intelligence Council (NIC), in its report titled "Global Trends
2030: Alternative Worlds", said India will witness a surge in economic power after
2015 when China's wealth begins to decline.
"In 2030 India could be the rising economic powerhouse that China is seen to be
today. China's current economic growth rate - 8 to 10 per cent - will probably be a
distant memory by 2030," said the fifth instalment of the NIC report.
With the emergence of India as a global power, Pakistan may even cease to exist.
"Also of significance, India will most likely continue to consolidate its power
advantage relative to Pakistan. India's economy is already nearly eight times as large
as Pakistan's; by 2030 that ratio could easily be more than 16-to-1," stated the report.
Apart from India and China, the economies of Brazil, Colombia, Indonesia, Nigeria,
South Africa, and Turkey will emerge strong, while current advanced economies of
Europe and North America are likely to decline.
It was also forecasted that middle-class population will lead the world by 2030 and
that poverty rate will come down by half. Improved standards in education, health and
other sectors will enable two-thirds of the world's population to move into cities by


'For the first time, a majority of the world's population will not be impoverished, and
the middle classes will be the most important social and economic sector in the vast
majority of countries around the world. Demand for consumer goods, including cars,
(will) rise sharply with the growth of the middle class,' said the report.
Despite the prospect of emerging as strong global players, India and China may likely
remain in their middle-income status due to their inability to increase their per capita
income to the standards of advanced economies. The increase in middle-class
consumption of resources will prevent the nations' economies from moving up the
value chain. More investment in science and technology sectors and bridging the gap
between rural and urban classes will help address the issue, the report said.
The report comes at a time when India is battling a wide range of economic concerns
from slow GDP growth to high inflationary pressure, largely on account of the
government's poor policy making procedures. The economic growth rate slumped to
5.3 percent, its lowest levels since 2009.


My perception is that we lack the initiative and we want to piggy back on somebodys
This happens even at academic level. 8 of 10 engineering pass outs are purchasing
projects to complete their studies to get graduation. The same trend continues at
corporate level also by purchasing the concepts and technologies from overseas
Agriculture is the profession carried out by most of rural Indians and we buy seeds,
pesticides and even technology like tissue culture from overseas.
We cannot blame the governments alone for this backdrop. But the central and state
governments are also responsible for the same. Governments and large corporate
should change their attitude towards the research and support almost all research
When government can support outsourcing industry by creating designated IT parks,
financial parks and special economic zones, why not for Research park also.
When Indian companies have all their needs are satisfied through indigenous products
or technology, we become economic superpower. And we expect, wish and want the
dream accomplished very soon.