PROGRAM: BACHELOR OF BUSINESS ADMINISTRATION

Subject Indian Economy

Subject Code BBA-303

Semester/Year 3RD SEMESTER/ 2ND YEAR

Section A

PROJECT NO. 1 (A1)

PROJECT TITLE ECONOMIC DEVELOPMENT:

CURRENT SCENARIO

Student’s Name TAMANNA

Student’s Enroll. No. ASB/BBA/20/033

Student’s Signature*

Submission Date SEP 8, 2021

Due Date
Faculty Name Prof. Shivali Verma
Marks Assigned by the
Faculty

Signature

Comments by the Faculty:

*By signing above you attest that you have contributed to this submission and
confirm that all work you have contributed to this submission is your own work. Any
suspicion of copying or plagiarism in this work will result in an investigation of
Academic Misconduct and may result in a “0” on the work, or possibly more severe
penalties, as well as a Disciplinary Notice on your academic record.
 MID TERM ASSESSMENT

ECONOMIC DEVELOPMENT: CURRENT SCENARIO

Economic Development

 According to Michael Todaro “Economic development is an

increase in living standards improvement in self-esteem needs
and freedom from oppression as well as a greater choice”
 It is referred to us as the quantitative and qualitative changes in
the economy such as development if human capital, critical
infrastructure, regional competitiveness environmental
sustainability, social inclusion, health, safety, literacy etc.

ECONOMIC DEVELOPMENT VS ECONOMIC GROWTH

ECONOMIC GROWTH ECONOMIC DEVELOPMENT

It indicates quantitative It indicates qualitative
improvement in the economic improvement in the economic
progress of a country. progress of a country.
It shows growth in national It shows not only a sustained
income and per capita income increase in national and per capita
over time. income but also quantitative
changes which ideas to higher
standard of living.
A country may grow but it may Economic development includes
not develop. the nation of economic growth.
Economic growth = size of Economic development = size of
output (a quantitative output + welfare (a qualitative
concept) concept)
It is an automatic process that It requires the intervention from
may or may not require government as all the
intervention from the developmental policies are formed
government. by the government.
Ex. GDP , GNP etc. Ex. HDI, crime rates, infant
mortality rate, life expectancy etc.
INDIA’S ECONOMIC GROWTH
After growing at very high rates for years, India’s economy had already
begun to slow down before the onset of the COVID-19 pandemic.
Between FY17 and FY20, growth decelerated with weaknesses in the
financial sector compounded by a decline in the growth of private
consumption.

The implementation of a national lockdown on March 24, 2020,

brought economic activity to a halt, affecting both production and
consumption. As a result, growth was negative in the first half of the
fiscal year (April to September 2020) and only modestly positive in the
second half. Over the entire FY21, India’s economy is estimated to have
contracted by 8.5%.

In response to the COVID-19 shock, the Government and the Reserve

Bank of India took several monetary and fiscal policy measures to
support vulnerable firms and households, expand service delivery (with
increased spending on health and social protection) and cushion the
impact of the crisis on the economy. Thanks in part to these proactive
measures, the economy is expected to rebound – with a strong base
effect materializing in FY22 – and growth is expected to stabilize at
around 6-6.5% thereafter.

YEAR GDP GROWTH ANNUAL CHANGE

(%) (%)
2020 -7.96 -12.01
2019 4.04 -2.49
2018 6.53 -0.26
2017 6.80 1.46
2016 8.26 0.26

10
8.26
6.8 6.53
5
4.04
2.49
1.46
0 0.26 0.26
2016 2017 2018 2019 2020 GDP GROWTH
ANNUAL CHANGE
-5

-7.86
-10
-12.01

-15
INDIA’S ECONOMIC DEVELOPMENT
Since the 2000s, India has made remarkable progress in reducing
absolute poverty. Between 2011 and 2015, more than 90 million
people were lifted out of extreme poverty. However, the COVID-19
pandemic has reversed the course of poverty reduction, at least
temporarily. The economic slowdown triggered by the outbreak is
believed to have had a significant impact on poor and vulnerable
households.

After March 25, 2020, when a national lockdown was implemented,

economic activity slowed sharply. As a result, output fell by a whopping
25% (year on year) between April and June, the first quarter of the FY21
fiscal year.

The informal sector, where the vast majority of India’s labour force is
employed, has been particularly affected. As in most countries, the
pandemic has exacerbated vulnerabilities for traditionally excluded
groups, such as youth, women, and migrants.

The response of the Government to the COVID-19 outbreak has been

swift and comprehensive. A national lockdown to contain the health
emergency was complemented by a comprehensive policy package to
mitigate the impact on the poorest households (through various social
protection measures) as well as on small and medium enterprises
(through enhanced liquidity and financial support).

To build back better, it will be essential for India to stay focused on

reducing inequality, even as it implements growth-oriented reforms to
get the economy back on track. The World Bank is partnering with the
government in this effort by helping strengthen policies, institutions,
and investments to create a better future for the country and the
people through green, resilient an inclusive development.

HUMAN DEVELOPMENT REPORT 2020 (INDIA)

 India’s Rank = 131/189 countries
 HDI of India = 0.645 ( medium human development)
 50% increases in HDI since 1990 = 0.645(0.429)
 Since 1990 , life expectancy and birth rate increased by
12 years
  India’s HDI of 0.645 is better than south Asian neighbours
ECONOMIC INDICATORS
LITERACY RATE
It is defined as the percentage of the population of given age group that
can read and write. The adult literacy rate corresponds to ages 15 and
above, the youth literacy rate to ages 15 to 24 and the elderly ages 65
and above.

Literacy in India is a key for socio-economic progress. Despise

government programmes, India’s literacy rate increased only sluggishly.
The census indicated a 2001-2011 decadal literacy growth of 9.2%
which is slower than the growth seen during the previous decade.

The main cause of illiteracy in India is because of the complex web of

social and economic divide in the country. Economic disparities, gender
discrimination, caste discrimination, and technological barriers lead to
illiteracy in India. India has the largest population of illiterate adults,
which further contribute to this vicious cycle of illiteracy in India.

YEAR LITERACY RATE ANNUAL CHANGE

2018 74.37% 5.07%
2011 69.30% 6.55%
2006 62.75% 1.74%
2001 61.01% 12.79%
1991 48.22% 7.46%
1981 40.76% 7.46%
 literacy rate
80
74.37
70 69.3
61.01 62.75
60

50 48.22 literacy rate

40 40.76

30

20

10

0
1981 1991 2001 2006 2011 2018

INFLATION RATE
Inflation is the decline of purchasing power of a given currency over
time. A quantitative estimate of a rate at which the decline in
purchasing power occurs can be reflected in the increase of an average
price level of a basket of selected goods and services in an economy
over some time period.

Inflation rate in India is expected to be 5.40% by the end of this

quarter, according to trading economics global macro models and
analysts expectation. In long term , the India inflation rate is projected
to trend around 4.20% in 2022and 3.60% in 2023.

The causes of increasing inflation in India are increase in money supply,

deficit financing, increase in government expenditure, inadequate
agricultural and industrial growth, rise in administered prices and rising
import prices.

YEAR INFLATION RATE ANNUAL CHANGE

2020 6.62% 2.90%
2019 3.72% - 0.22%
2018 3.95% 0.62%
2017 3.33% - 1.62%
2016 4.95% 0.04%
 INFLATION RATE
7.00%
6.62%
6.00%

5.00% 4.95%

4.00% 3.95% INFLATION RATE

3.72%
3.33%
3.00%

2.00%

1.00%

0.00%
2016 2017 2018 2019 2020

CRIME RATE
A measure of change in recorded crime, over a given time period based
upon official statistics for offences or offender rates.

Crime in India is being recorded since the British came into India by the
National Records Bureau, under the Ministry Of Home Affairs. As of
2019, a total of 51.5 lakh cognizable crimes comprising 32.2 lakh Indian
Panel Code (IPC) crime and 19.4 lakh Special and Local Laws (SLL)
crimes were registered nationwide.

More than a fifth of all registered crimes (10.5 lakh) were classified as
offences affecting the human body, which included violent act as
murder, kidnapping, assault and death by negligence.

The causes of increasing crime in India

 Lack of proper education system

 Ineffective law and order system
 Alcoholism and drugs
 Television
 Poverty and Unemployment

YEAR PER 100K ANNUAL % CHANGE

POPULATION (%)
2018 3.08 - 1.46
2017 3.12 -3.02
2016 3.22 -4.86
2015 3.29 -7.34
2014 3.66 2.04

CRIME RATE per 100k population

3.80%
3.66%
3.60%

3.40% 3.39%
CRIME RATE per 100k population
3.20% 3.22%
3.12% 3.08%
3.00%

2.80%

2.60%
2014 2015 2016 2017 2018

Sources:
 Macrotrends.net (DATA)

 Wikipedia