HS 201

introducing

Economic Growth & Poverty

4/14/12

Features of

Indian Economy

Low Per Capita Income •Low Standard of Living •High Poverty •Inequal Income Distribution •Dominance of Agriculture •Existence of Rich Resources •Inadequate Capital Formation •Unemployment and Underemployment •Technological Backwardness •Infrastructural Inadequacies 4/14/12 •Dualistic Economy

2012 .Click to edit Master text styles Second level Third level Fourth level Fifth level GDP Growth 2000 .

4/14/12 .GDP Growth during 20002012 SOURCE : WWW.

Economic sectors 1 2 3 Finance Industries Agriculture These are the main factors dominating Indian Economy 4/14/12 .

1 • Finance Sector Involves money exchange .

followed by six others in 1980 ü Since then. the number of bank branches has increased from 10.000 ATMs ü The public sector banks hold over 75% of total assets of the banking industry.15.5% respectively ü The BSE Sensex is generally regarded as the most popular and 4/14/12 precise barometer of the Indian stock markets ü .Finance Sector Prime Minister Indira Gandhi nationalised 14 banks in 1969. India has 88 scheduled commercial banks (SCBs) — 28 public sector banks.2% and 6. with the private and foreign banks holding 18.120 in 1969 to 1.910 in 2008 ü Currently.000 branches and 17. 29 private banks and 31 foreign bank ü They have a combined network of over 53.

2 • Industrial Sector Involves the mobilization of assets in terms of products and services .

knitted garments. casual wear and sportswear o 4/14/12 .6% of the GDP and employ 17% of the total workforce o one-third of the industrial labour force is engaged in simple household manufacturing o o India is 16th in the world in terms of nominal factory output Textile manufacturing is the second largest source for employment after agriculture and accounts for 26% of manufacturing output o  Tirupur has gained universal recognition as the leading source of hosiery.Industrial Sector Industry accounts for 27.

3 • Agricultural Sector It covers the SOURCE and MAINSTAY of Indian Economy .

 sugar. turmeric and black pepper World's largest cattle population Ø Ø Ø Second largest producer of wheat. tea. groundnut and inland fish Ø Ø Third largest producer of tobacco India accounts for 10% of the world fruit production with first rank 4/14/12 in the production of banana and sapota Ø . ginger. cashew nuts.Agricultural Sector Ø Agriculture is the mainstay of the Indian economy It is the means of livelihood of almost two thirds of the work force in the country Ø Ø Agriculture accounts for approx 18% of India's GDP Largest producer in the world of milk. rice. coconuts.

vibrant and full of business opportunities”. Goldman Sachs John Redwood Economic Competitiveness Policy Group. “India has evolved into one of the world's leading technology centers“. India will be among the three largest economies in the world. as told to Business Week. BRIC Report.an increasing presence of multinationals and an upswing in the IT exports”. stayed for the quality and are now investing for innovation”. Managing Director Volvo Car India Travyn Rhall. “The Indian market has two core advantages . By 2032. ACNielse n 4/14/12 Jack Welch General Electric 12 . “India is a very exciting market and the luxury car segment is growing exponentiallyPaul de Voijs Mr here”. August 2005 - “India is a developed country as far as intellectual capital is concerned”. UK Craig Barrett Intel Corporation “I have never seen India so dynamic.Quote Unquote -about Economic Growth “India is now truly a land of opportunity”. Cisco System Inc. Peter Loescher President and Chief Executive Siemens “We came to India for the costs. Dan Scheinman.

with Tata Steel acquiring Corus. Mittal buying Arcelor and Tata looking set to buy Jaguar and Land Rover from Ford.72 billion dollars and is said to be one of the “preferred options” for FDI India’s poverty level is decreasing by 10% annually Indian companies have gone on a buying rampage.2% increase in GDP per year India is already the third largest economy in the world at PPP India has seen a huge amount of foreign direct investment in the country. indicating that India is not only growing but developing too.61 trillion dollars.Some Encouraging Statistics… India is the second fastest growing major economy with a 9. 4/14/12 . Unemployment has dropped by 2% annually. and illiteracy and mortality rates have also been falling. Every year India’s middle class is increased by 40. currently worth 1. the largest in South East Asia.000.000 new members which shows that the wealth is truly entering society The Bombay Stock Exchange’s value has been consistently rising. totaling 67.

Is India Really Shining? 4/14/12 .

2% of all Indians are unemployed – India comes in at 94th in terms of employment. 7.368 were 0 is perfect equality and 1 is perfect inequality. Using the GINI coefficient – which is the only reliable method of calculating inequality India scores 0.Poverty • 345 Million Indians live under the poverty line. 4/14/12 • • . This means that one in three Indians live on less than twenty rupees per day. putting India in the bottom 50 of all ranked nations in the world.

What is • • POVERTY ? Poverty is hunger. Poverty is being sick and not able to see a Doctor. • • • • • 4/14/12 . Poverty is not having the security of job. Poverty has no shelter. Poverty is Powerlessness Poverty is not having access to clean water. Poverty is surviving one day at a time.

Second level of India’s population (380 million) is nearly 38% Third level report is based on new methodology poor. This and level Fourththe figure is 10% higher than the present poverty estimate of 28. Fifth level Since 1972 poverty has been defined on basis of the money required to buy food worth 2100 calories in urban areas and 2400 calories in rural areas.Poverty Statistics • According to a text styles Click to edit Master recent Indian government committee constituted to estimate poverty.5%. • . In June this year a government committee headed by NC Saxena estimated 50% Indians were poor as against Planning Commission’s 2006 figure of 28.5%.

Reasons for POVERTY a) Poor Infrastructure Balance of Payments deterioration High Levels of Debt Large Budget Deficit Rigid Labour Laws a) a) a) a) 4/14/12 .

with 54% of the Population engaged in Farming.4 hectares – only enough to feed their own family. 43 % of all Indian land is used in agriculture.Agriculture is still the biggest employer in India. but it only contributes 18% of the nation’s GDP Many farmers are subsistence farmers. 4/14/12 . According to the WHO. with little left over to sell. 61% of all farmers cultivate less than 0.

or a bumper crop and collapsing prices. 4/14/12 This woman is looking for her brother who left a suicide note at her house. In the Vidarbha District of Maharashtra 1920 farmers killed themselves between January and August of 2007. produced by extortionist interest rates which are unregulated by the government. farmers are often driven to suicide. they cannot find his body.Agricultural Prices fluctuate wildly and often farmers are forced into debt. In one district of Maharashtra alone. Pressed by either famine and no crops. Since 1997 when the statistics were first recorded 25. They enter “cycles of debt” so the money they earn is never their own.000 farmers have taken their lives in India. a farmer kills himself every eight hours. .

7 million Indians have AIDS or HIV out of which 40 % are women We only one hospital bed for every 74 patients who need one. Despite these statistics.Healthcare: Our Fundamental Right Our life expectancy is 68 years. the Indian Government still spends more on defence than it does on health. We have only one doctor for every 1. 4/14/12 . making our life expectancy the 139nth out of 172 countries.230 people. A growing threat: 5.

• Our literacy rate is 61% making us the 145th in the World.6% on education. Literacy is defined as “The ability to sign one’s name” so complete literacy is likely to be even less. • Guns are more important than books: 2. Is it guns or education that will really make India shine? Educatio n 4/14/12 .9% of GDP is spend on defence compared to 2. just above war-torn Sudan and just below genocidal Rwanda.

of which 193. Goa.2 million are in the rural areas and 67. and Punjab etc whereas it is below 50% in Bihar (43) and Orissa (47). The poverty level is below 10% in states like Delhi. It is between 30-40% in Northeastern states of Assam. More than 75% of poor people reside in villages. Tripura. Poverty level is not uniform across India. an estimated 260.So the question still remains. Of its nearly 1 billion inhabitants. and Mehgalaya and in Southern states of TamilNadu and Uttar Pradesh. 4/14/12 .1 million are in urban areas.3 million are below the poverty line. is India really having a the QUESTION… So Economic Growth or it is hiding the poverty reality??? the  TRUTH is : Even after more than 50 years of Independence India still has the world's largest number of poor people in a single country.

The Gradual Approach – It is based on the belief that the growth of industry is going to begin by expansion of other sectors rather deliberate expansion of the Industrial Sector by the Government. § 4/14/12 . where certain minimum Investment. Purchasing Power or Market Size (push) is necessary. § Approach for Economic Balance The Big Push Approach – It is based on the game ‘race’.

v v Tea m 4/14/12 Lokesh Chandra Basu Anshul Garg Computer Science and Engineering Indian Institute of Technology. Roorkee .

What’sYou! Thank Your Message? 4/14/12 .

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