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    The document discusses the recent slowdown of the Indian economy and whether India should adopt more protectionist policies. It notes that while India experienced strong growth over the past decade, growth has recently slowed. It then lists some of India's economic strengths and weaknesses. Some of the reasons provided for the slowdown include high inflation, slowing reforms, a rising current account deficit, and global economic issues. The document also outlines some of the economic justifications commonly given for protectionism, such as infant industry arguments, as well as arguments against protectionism such as increased prices for consumers and production inefficiencies.

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    The document discusses the recent slowdown of the Indian economy and whether India should adopt more protectionist policies. It notes that while India experienced strong growth over the past decade, growth has recently slowed. It then lists some of India's economic strengths and weaknesses. Some of the reasons provided for the slowdown include high inflation, slowing reforms, a rising current account deficit, and global economic issues. The document also outlines some of the economic justifications commonly given for protectionism, such as infant industry arguments, as well as arguments against protectionism such as increased prices for consumers and production inefficiencies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    37 views10 pages

    Slowdown of Indian Economy

    Uploaded by

    Aditi Gupta
    The document discusses the recent slowdown of the Indian economy and whether India should adopt more protectionist policies. It notes that while India experienced strong growth over the past decade, growth has recently slowed. It then lists some of India's economic strengths and weaknesses. Some of the reasons provided for the slowdown include high inflation, slowing reforms, a rising current account deficit, and global economic issues. The document also outlines some of the economic justifications commonly given for protectionism, such as infant industry arguments, as well as arguments against protectionism such as increased prices for consumers and production inefficiencies.

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 10

    Slowdown of Indian Economy : Time to be Protectionist?

    GROUP: 9 ABHINAV ARYA (2011007) ADARSH RAJ BARONIA (2011013) ADITI GUPTA (2011014) ARJIT AGARWAL (2011045)

    An Economic Idea of India


    Strengths
    sustained growth at 6.4 for over a decade (but recent slowdown) strong export potential, current a/c deficit low healthy forex reserves low external debt deepening financial sector knowledge base advantage, demographic surge

    Weaknesses
    fiscal deficit high, debt gdp ratio high fiscal situation of states worse inadequate infrastructure, huge funding need unsatisfactory investment climate rising gap between rich and poor states dependence on oil imports, monsoons slowing of reforms, coalition compulsions social indicators below world average

    Real GDP growth of India


    2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*

    4.4%

    3.9%

    4.6%

    6.9%

    8.1%

    9.2%

    9.7%

    9.9%

    6.4%

    6.8%

    10.4%

    6.9%

    GDP - composition by sector

    Agriculture: 18.1% Industry: 26.3% Services: 55.6% (2011 estimate) (Data released on February 2012)

    Source : Global Finance

    Reasons for slowdown :


    High Inflation Slow Reform Movement Stalling Growth Prospects! Earnings Slowdown Impacted by higher Operating costs! 4. Current Account Deficit Signs of Growing Concern! 5. Industrial Growth A bit too volatile to Digest!
    1. 2. 3.

    6.
    7. 8. 9. 10.

    Rising Interest Rates Renders Working Conditions


    Costly! Fiscal Deficit The Unbudgeted woes! FII Selling Moving back to the West! Global woes India still not decoupled yet! Corruption Anna Hazare effect

    Protectionism
    represents any attempt by a government to impose restrictions on trade in goods and services between countries:
    0 Tariffs - import taxes. 0 Quotas - quantitative limits on the level of imports allowed. 0 Voluntary Export Restraint Arrangements where two countries

    make an agreement to limit the volume of their exports to one another over an agreed period of time.
    0 Embargoes - a total ban on imported goods. 0 Intellectual property laws (patents and copyrights). 0 Export subsidies - a payment to encourage domestic production by

    lowering their costs.


    0 Import licensing - governments grants importers the license to import

    goods.

    Economic justifications for protectionism


    0 Infant Industry Argument 0 Protection a reaction against import dumping
    0 The nature of Dumping 0 Export subsidies and dumping in developing countries 0 Protection against dumping : Anti Dumping

    0 Externalities, Market Failure and Import

    Controls
    0 Danger of over specialization

    Economic Arguments against Protectionism


    0 Hurts consumers

    0 Market distortion:
    0 Higher prices for consumers 0 Reduction in market access for producers

    0 Loss of economic welfare


    0 Regressive effect on the distribution of income 0 Production inefficiencies

    0 Little protection for employment


    0 Negative multiplier effects

    The diagram below shows the welfare consequences of imposing an import tariff

    0 http://articles.timesofindia.indiatimes.com/2011-09-

    25/india/30200404_1_economic-crisis-globaleconomy-protectionism

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