slowdown of indian economy
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Slowdown of Indian Economy :
Time to be Protectionist?
GROUP: 9
ABHINAV ARYA (2011007)
ADARSH RAJ BARONIA (2011013)ADITI GUPTA (2011014)
ARJIT AGARWAL (2011045)
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An Economic Idea of India
Strengths
sustained growth at 6.4 for overa 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 worldaverage
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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 sectorAgriculture: 18.1%Industry: 26.3%
Services: 55.6% (2011 estimate)
(Data released on February 2012)
Source : Global Finance
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Reasons for slowdown :
1. High Inflation
2. Slow Reform Movement Stalling Growth Prospects!
3. Earnings Slowdown Impacted by higher Operatingcosts!
4. Current Account Deficit Signs of Growing Concern!
5. Industrial Growth A bit too volatile to Digest!
6. Rising Interest Rates Renders Working Conditions
Costly!
7. Fiscal Deficit The Unbudgeted woes!8. FII Selling Moving back to the West!
9. Global woes India still not decoupled yet!
10. Corruption Anna Hazare effect
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Protectionismrepresents 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.
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Economic justifications for protectionism
0
Infant Industry Argument
0Protection a reaction against import dumping
0 The nature of Dumping
0 Export subsidies and dumping in developing countries
0 Protection against dumping : Anti Dumping
0Externalities, Market Failure and Import
Controls
0Danger of over specialization
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Economic Arguments against
Protectionism0Hurts consumers
0Market distortion:
0 Higher prices for consumers
0 Reduction in market access for producers
0Loss of economic welfare
0Regressive effect on the distribution of income
0Production inefficiencies0Little protection for employment
0Negative multiplier effects
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The diagram below shows the welfare consequences of imposing an
import tariff
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0 http://articles.timesofindia.indiatimes.com/2011-09-
25/india/30200404_1_economic-crisis-global-
economy-protectionism
http://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionismhttp://articles.timesofindia.indiatimes.com/2011-09-25/india/30200404_1_economic-crisis-global-economy-protectionism -
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