1. Current Issues in Indian Economy: Challenges Ahead
DR. PATIL.V.D.
DEPARTMENT OF ECONOMICS,
Rayat Shikshan Sanstha’s
S.M.JOSHI COLLEGE HADAPSAR, PUNE

2. Scheme of Presentation
What are the Major Issues?
Structure of Economic Indicators
Macro-Economic Indicators
Monetary and Fiscal
Sectoral Economic Indicators
Economic Policy Changes –Ideologies and Adjustments
Socio=Economic Indicators
Demographic – Population-Composition & Urbanisation
Rural Commodity and Financial Market
Data and Limitations
Developing and Institutional Phenomenon

3. Backdrop We have Phases in Growth: A travelogue in Strategy:
1950 to 1967: Neharuvian Era
1968 to 1976: Leaning Left: The Poverty Issues and inclusiveness
1976 to 1985: Unstable Politics - Undecided Path
1985 to 1999: Creating and solving the Crisis
2000 to 2013: Taking on the World.
Turning Right 2014 onwards –Next Five Years
At macro level India seem to have done fairly good in some indicators such as balance of payments, resilience to external shocks, service sector growth, Foreign exchange reserves ,Information technology (IT) and Telecom.
GDP growth was hovering around 8 to 9% per annum with Investment and savings rates were quite high 32 to 36%. What it has to do with inclusivity?
Poverty impact of growth has been muted: poverty declined from 36% in 1993/94 to 28% in 2004/05, a 0.8% point reduction p.a. compared to 1.6% poverty reduction p.a. in Bangladesh and Nepal.
This has an indication that India has many ifs and buts in straight jacket understanding of indicators

4. The Health Indicator Approach
Health indicators are like BP, HbA1c, Psa etc
The Health Indicator Approach exploits the fact that different time-series do have different cyclical periods. These have political overtones also
Time-series can be classified into Coincident, Leading and Lagging Indicators
Coincident: Measures of Output, Income, Employment and Sales
Leading: Placement of New Orders, Intention to Build and Changes in Profitability
Lagging: Installment Credit Outstanding and Interest Rates

5. List of Major Indicators
Trends in Gross Domestic Product (GDP):
Contribution of Agriculture, Industry and Services
Macro Economic Indicators
Fiscal Indicators
Inflation Rate
Foreign Trade
Balance of Payment
Foreign Exchange Reserves
Foreign Direct Investment (FDI) Trends
Sensex
Exchange Rate
Savings/GDP Ratio
Human Development Index

6. Structure of Economic Indicators
Macro-Economic Indicators
Monetary and Fiscal
Sectoral Economic Indicators

7. Health of the Economy Growth Rate of GDP at Factor Cost (at 2004-05 prices) (in %).

8. Sectoral Share in GDP at Constant (2004-05) Prices (in %)

9. Growth in GDP at Market Prices (at 2004-05 prices) .

10. Are we on a Growth Path?

11. Monetary Indicators (%).
* Base rate is median base rate of SCBs. ** Weighted Average, # As a proportion of GDP, Source: RBI. ^ Changed on ^^ Changed on ## Changed on ≠ Changed on

12. Growth Rates of Core Industries (%).

13. Growth Rates of Index of Industrial Production-Use Based Categories (Base: =100) (Year on Year %) .

14. Inflation .

15. Inflation : Watchdog of Economic Threat

16. Ratio of Savings and Investment to GDP At current market prices (%)

17. Trade Deficits

18. Our Credibility

19. Pulse of the Corporate Economy

20. Fiscal Economy Have we managed Revenue Generation
Development Expenditure; Capital Expenditure
Revenue and Fiscal Deficits

22. Growth Rates of Index of Industrial Production- Manufacturing Subgroups (Year on year %).

23. Contd… .

24. FDI in India
FDI is investment made by a foreign individual or company in productive capacity of another country. It is the movement of capital across national frontiers in a manner that grants the investor control over the acquired asset.
India is considered a stable country for investing in by corporate overseas.
India has displaced US as the second-most favored destination for (FDI) in the world after China according to an AT Kearney's FDI
FDI is a tool for jump-starting economic growth through its bolstering of domestic capital, productivity and employment.

25. FDI in India FDI has an impact on Country's trade balance
Increasing labour standards and skills
Transfer of new technology and innovative ideas
Improving infrastructure, skills and the general business climate.
INVESTMENT IN INDIA
India is the second largest consumer market.
It is also one of the largest factor of production consumer and technology adopter. The production technologies are changing very fast..
The FDI inflows in India re very beneficial to the investors and also boost up the domestic production and consumption sectors.

26. Top sectors attracting FDI
Fuels (Power & Oil Ref.) (35.93%)
Telecommunications (radio paging, cellular mobile & basic telephone services) (10.56%)
Electrical Equipment (including Computer Software & Electronics) (9.50%)
Food Processing Industries (Food products & marine products) (9.43%)
Service Sector (Fin. & Non-Fin. Services) (8.28%).

27. Domestic Capital Formation

28. Trade as an Engine of Growth

29. India's English-speaking population is highly valued by American, Canadian and British investors.
India received investments from GE Capital, American Express, Citibank, Conseco, British Airways, Dell Computers and Reuters.
This FDI resulted in the development of call centres, back office support and facilities to handle knowledge-intensive activities.
From software giant Microsoft to telecom biggies Nokia and Samsung to auto majors Honda and Toyota, global players now eye India as the most attractive destination for investment.
Although far behind China, India figures among the ten most attractive destinations for foreign investment, according to a new survey.

30. Economic Policy Changes –Ideologies and Adjustments
Command and Control Policy
Reaching the Unreached
Liberalisation and Globalisation
Opening of the Economy to the World and Loosening the Controls
Trade as an Engine of Growth
Changing Demands – Consumers Choices
Changing Suppliers and Dictating the markets

31. Socio-Economic Indicators
Demographic – Population-Composition & Urbanisation
Birth rates and Death Rates
Composition of Rural Urban Population
Composition of Workforce
Process of Urbanisation
Emergence of Small Towns and their Importance
Necessity of fast transit
Rural Commodity and Financial Market
Market reforms in Rural Areas
FDI in retail in a selective manner
Rural Industrialization and keeping rural youth engaged
Agricultural Mechanization and Using the Rural Demographic Dividend

33. Human Development Index

34. Comparing with Neighbours

35. Data and Limitations: We need to work
Developing and Institutional Phenomenon
We are a Developing Country with an Enormous Size of Population and Economic Activities.
Any data therefore have limitations
Ours is an Institutional society and quite often depend on non-market stimuli

36. Are the Policy Advisors of any Use?