7th September 2022

Indian Economy
in
Global Scenario
Article Presentation
 What is GSDP?
GSDP is the sum total of value added by
different economic sectors (Agriculture,
Industry & Services) produced within the
boundaries of the state calculated without
duplication during a year.
It is one of the measures of economic
growth for a state's economy.
 The Growth state domestic (GSDP) has increased in the post-economic reform period beginning from the
early 1990s when compared to the 1980s.
The richer states have grown faster than the poorer states.
This is because the poorer states in general have experienced a faster growth in the population.

According to Central statistical organization data:

1) In The Early 1960s – the per capita GSPD of the richer states (Punjab, Maharashtra, Gujarat) was, on average,
about 80% higher than the average per capita GSDP of the bottom four states (Bihar, Uttar Pradesh, Orissa, and
Madya Pradesh).
2) Early 1970s – This disparity increased to 125%.
3) 1980s - was 100%.
4) Mid 1990s - escalated to 156%.
5) 2007 – 2010 - further to 176%.

States whose per capita GSDP is below the national average together account for over 60 percent of the country’s
population and as high as 75 percent of the country’s population below the poverty line.
These backward states also account for nearly 60 percent of the population belonging to the socioeconomically
disadvantaged sections like scheduled casts and scheduled tribes. Hence it is necessary for improving regional and
social equity and for strengthening national integration.
To improve the backward
regions:
1. Greater public investment
needs to be given higher
priority in the development
strategy.
2. Speeding up social
transformation through
the empowerment of the
common people and
3. Measures of good
governance.
Despite the backward regions,
there has been a problem of
severe imbalance within the
state, the spread of Naxalism in
more than 100 districts in the
country is a warning sign.
The center and the state
together must deal with the
problem.
Special efforts must be made:
1. to remove the discontent,
2. giving a sense of hope and
fairness among the people
and
3. giving them dignity and
hope.
Otherwise, the nation would
not attain the dignity and pride
of a good society.
 Growth prospect: An Assessment

The Indian economy has undisputedly moved to a higher

growth path during the last three decades.

The limited reforms and an expansionary fiscal policy helped the economy to achieve an average
growth rate of 5.5 percent in the 1980s,
but its sustainability was doubtful,
this is because of the gulf war and the oil price rise in the 1990s and 1991, and also the policies of
the 1980s were associated with the higher levels of domestic and foreign debt leading to fiscal and
bop crisis.

Economic reforms initiated in 1991 were wide- The economy which was developed in the
ranging, involving: post-reform period gets reflected in
1. the abolition of the industrial licensing successfully meeting several challenges such
system, as:

2. the Liberalisation of trade, and a. The East Asian crisis in the late 1990s,

3. Unfreezing of the exchange rate among b. The Gulf war in early 2000, and
others. c. The severe drought in 2002.
 In the wake of the global economic crisis, economic
growth in India slowed in 2009 and recovered partly in
the next two years. World trade which fell by about a
quarter in 2009, has not yet recovered to the pre-crisis
level of $16 million.
India continued to perform reasonably well in comparison
to most other nations.

In the absence of the manufacturing sector in the nation, a higher GDP growth rate cannot be achieved.

Given that the Indian manufacturing sector has been ‘idiosyncratic’. It is necessary to create an enabling
environment for private investors to cope with business and financial risks and meet global competitiveness.

The private firms will not enter into labor-intensive manufacturing without labor market reforms leading to a
flexible exit policy, policies must be made to strengthen to close both physical and human infrastructure gaps,
particularly in the backward regions.

India attained above 8 percent growth consecutively for

five years between 2003 and 2007 which attracted
worldwide attention and many observers believed that
India, like China, was riding on the high road of growth.
The post-reform shows that India’s growth is considerably
uneven.
 To achieve a higher growth rate in long run, there are certain
things to be concentrated on in economic reforms.

1) Labour market reforms : Pangariya an 2) Government savings: Govt savings play a

economist stated that the large private firms
will not enter labour intensive manufacturing
without labour market reforms leading to
flexible exit policy .
Policy initiatives should build more strong so
that can close gaps of both physical and human
infrastructure particularly in the backward
region .
major role in restoring the savings and
investment levels.
Govt savings depends on
1) rationalization and restructuring of current
govt expenditure
2) increasing the volume of tax revenue

It is difficult to remove subsidies for goods like oil or power in a democratic country.
Because of this, there is a need for proper agreement among all the political parties on which subsides are
necessary and prioritizing the basic needs of food, water, shelter education, etc. there is a need of
monitoring these types of welfare programs, and concentrate more on essentials can reduce the govt
expenditure. 
3) demographic dividend: if the available
workforce can be engaged in productive activities
that can lead to additional growth.
And also creating employment opportunities to
labor with skill development programs. So they can
match the demand of the growing economy.
4) labour laws : labour laws in organized sector are too
restrictive. This will be difficult for industries to adapt to
the new technology and changing market conditions.
Some of the labour laws meant to protect interests the
labour of some segment and going against the interests
of whole other working class labour . there should be
proper framework with reasonable time frame , so even
the unemployed people can be employed for some other
productive uses.

5) land market: there are some limitations in the old land acquisition act and industries facing some issues
with this act. So there is a new act is under consideration in the parliament.
Govt should develop a regulatory framework, so that can help in landowner property rights . and
A proper tenancy registration will help tenants to claim benefits at the time of crop failures.
Encouraging contract farming, opening up retail market to foreign players.

6) regional backwardness\disparities: there are some differences not only among the states but also within the
states. When the benefits accrue to small groups and large groups are left behind, social stability becomes a casualty
and the growth process comes to a halt.
 Sustainable Development And Climate Change
Greenhouse gas emission:
1. 1970 – 2000: increased by
1.3% per year.
2. 2000 – 2010: increased by
2.2% per year.
India’s per capita carbon
emissions were 1.7 metric
tonnes in 2010, well below the
world average of 4.9 metric
tonnes.
Sustainable development is important for It articulates the concept of
achieving intergenerational equity. fairness amongst all generations
in the use and conservation of
the environment and its natural
resources.
Unsustainable More in
Business-as-
Consumption developed CARE for future generations.
usual approach
patterns countries
It means the current generation
is merely ‘borrowing’ the earth
What is the dominant cause of climate change? from the future generation.
Anthropogenic/human
activities OR

The present generation cannot

2015 – TWO landmark International events: be selfish to consume the entire
sources available and leave the
United nations Framework Sustainable Development goals future generation to find a
Convention on Climate Change (SDGs) solution.
(UNFCCC)
 United Nations Framework
Convention on Climate Change
(UNFCC):
Adopted by 195 nations in Paris
in December 2015.

AIM: keeping the rise in global

temperature well below 2
degrees Celsius.

Sustainable Development
Goals:
In September 2015
Set the development agenda for
the next 15 years

AIM: Guiding the international

community and national
governments on a path of
sustainable development.
 The Agreement provides a binding obligation for
developed countries
That is to provide financial resources to developing
countries for both mitigation and adaptation
while encouraging other countries to provide support on a
voluntary basis.
It reaffirms that developed countries will
take the lead in mobilizing climate finance.
What is Climate Finance?
Climate finance is local, national, or transnational funding
from public, private and alternative sources that seek to
support climate change mitigation and adaptation actions.
The decision also sets a new collective quantified
goal from a floor of US$100 billion per year prior
to 2025, taking into account the needs and
priorities of developing countries.
The Agreement also called upon developed
countries to scale up their level of financial
support with a complete road map for achieving
the goal of jointly providing US$100 billion by
2020 for mitigation and adaptation, by
significantly increasing adaptation finance from
current levels and to further providing
appropriate technology and capacity building
support.
 Domestically, many initiatives have been taken by India on climate change and sustainable development.

India's INDC (Intended Nationally Determined

Contribution) is comprehensive and covers all elements,
i.e. adaptation, mitigation, finance, technology, and capacity
building.

India has submitted ambitious targets in its Intended
Nationally Determined Contribution (INDC) in the
renewable energy sector, mainly from solar and wind energy.
With a potential of more than 100 GW, the aim is to achieve a
target of 60 GW of wind power as well as 100 GW of solar
power installed capacity by 2022.
1. The principle of equity
2. Common but Differentiated Responsibilities (CBDR),
3. Historical responsibilities and India's development
imperatives,
4. Enhanced adaptation requirements, etc.
have been a recurring theme in the INDC document.

The country's goal is to reduce overall emission intensity India's INDC has been welcomed as fair and
and improve the energy efficiency of its economy over time, ambitious specifically in the renewable energy and
at the same time protecting the vulnerable sectors and forestry sector.
segments of the economy and society.
 India – an initiative of setting up - an International Solar Alliance (ISA),

An alliance of 121 solar-resource-rich countries, lying fully or partially

between the Tropic of Cancer and the Tropic of Capricorn.

This alliance was jointly launched by the Prime Minister of India and the
President of France on 30 November 2015 in Paris.

The Paris declaration on the ISA states that the countries share the collective
ambition to undertake innovative and concerted efforts -- for reducing the
cost of finance and technology -- for the immediate introduction of
competitive solar generation and to pave the way for the future.

Successful implementation of
1. The Paris Agreement,
2. SDGs
3. the ambitious targets set out in the INDCs
would require huge financing which cannot be met through
budgetary sources alone.

In this context, it is important that the issue of mobilization and

tracking of finance, with increased importance to adaptation
and clean technology, is adequately addressed.
 The Challenge For India.
India is at the peak of an urban flare-up.
As the population increases, demand for every key service
will increase five to sevenfold.

These trends combined with the current challenges of

a. poverty eradication,
b. food and energy security,
Demographic c. urban waste management, and
dividend: d. water scarcity
The Economic will put further pressure on our limited resources.
growth potential that
can result from shifts At the same time, hidden are great opportunities.
in a population’s age
Unlike many countries, India has a young population and
structure.
therefore can reap the fruits of demographic dividend.

With more than half of the India of 2030 yet to be built, we have an opportunity to:
1. avoid excessive dependence on fossil fuel-based energy systems and
2. carbon lock-ins that many industrialized countries face today.
 To quote Rajat Kathuria (2018)
"India already has a version of carbon pricing in place and
over time could expand the depth and breadth of the price
signal.
Moreover, the climate change problem has reached a level
where it is no longer only a global commons issue.

There are localized benefits linked to unilateral action.

As the Kerala floods demonstrate, climate change will bring
about extreme weather events and the impact will
disproportionately be concentrated in the global south.

The whole world has a role to play and no one, not least the
developed world, can shirk responsibility.

But for now, India cannot wait and there are immediate
gains from pursuing low-carbon options that include job-
creation and lower air pollution amongst several others."
Thank You.

Sahithi (AC03)
Advithi (AC43)
Yashasvi (AC50)