INSTITUTE OF MANAGEMENT DEVELOPMENT AND

RESEARCH (IMDR), PUNE

POST GRADUTE DIPLOMA IN MANAGEMENT (PGDM)

Batch 2018 - 20

Summer Internship Report on “ECONOMIC SCENARIO OF

INDIA AUGUST 2019”

SUBMITTED TO: SUBMITTED BY:

Dr. Shruti Nagar Anand Rode
DM 1 (83)
ECONOMIC SCENARIO OF INDIA AUGUST 2019

1. GDP

GDP has declined to a 5 year low to 5.8%. Auto sector has shown immense decline,
dealerships have shut, resulting to increase in unemployment. Non- performing assets
have been increasing. Consumer demand and investment see a decrease. However,
imports have shown a marginal increase whereas exports have gone down.

2. INFLATION RATE

India's retail price inflation rate stood at 3.15 percent year-on-year in July 2019, little
changed from the previous month's 3.18 percent and slightly below market
expectations of 3.20 percent. Inflation remained below the Reserve Bank of India's
medium-term target of 4 percent for the twelfth consecutive month, despite recent
interest rate cuts.

3. UNEMPLOYMENT RATE

Youth unemployment rate has increased to 23.70%, entire sector unemployment has
risen, and it is very close to the life time high. Unemployment Rate in India averaged
4.32 percent from 1983 until 2018, reaching an all-time high of 8.30 percent in 1983
and a record low of 3.53 percent in 2011.

4. CONSUMER CONFIDENCE INDEX

Total amount saved by households in a year. The consumer confidence is very close
to life time low which was 88, while the last one was 97, which means consumer are
sceptical about spending the money in the market, until and unless it is necessary.
Household debts to GDP are at the highest, this can be because the car registrations
 have fallen, the festive season is just round the corner, and thus they are not very sure
and have not stocked up the vehicles.

5. BUSINESS CONFIDENCE INDEX

The Business Expectations Index (BEI) in India fell to 112.8 in the second quarter of
2019-20 fiscal years from 113.5 in the previous three-month period. Business
Confidence in India averaged 117.74 Index Points from 2000 until 2019, reaching an
all-time high of 127.50 Index Points in the second quarter of 2007 and a record low of
96.40 Index Points in the second quarter of 2009.

6. INTEREST RATE

Repo rate was cut by 35basic points to 5.40%. It was a 4th straight cut this year. People
expected it to be cut to 5.50%. However, the government is taking extra steps to revive
the economy.

7. CORPORATE TAX

Corporate tax stands at 35%, all time high was 38.95% in 2001and low of 32.44% in
2011. Newly it is 22%, after the announcement of it the markets rose by over 1500
points in one day.

8. BALANACE OF TRADE

India's trade deficit narrowed to USD 13.43 billion which means that the exports have
increased but imports have taken a hit because of the slowdown. Other countries have
seen less slowdown. 1. Based on the given information analyse the Indian economic
scenario from the view of an investor in stock market. - According to me after
analysing the parameter I can conclude that Indian economy going through a
slowdown and many people choose to invest in the stock market, in stocks which are
undervalued or in gold, as it is a safe instrument. 2. Where does one invest his/her
savings if the person is a risk adverse investor? - In gold as it a safe instrument to invest
in, or in government bonds.