Analysis of Indian Economy

LPG MODEL

Presented by: Prakash Chandola

Making the Indian economy as fastest growing economy, more efficient and globally competitive.

LPG model: Aim

After 17years…………………..

since 1991

one road leads India to economic prosperity and glory.

and

The other road leads it to social inequality

Indian economic itself : BOP imbalance Inflation 17%

All in all… low on cash

Reason behind LPG

To put end on rules / Regulation to control economy.

Open up various sectors of Economy .

liberalization

End of License Raj

Financial Sector Reformed : Financial institutions (Stock market, Forex market etc) can take decision with out consulting.

Trade investment reform: broad-banding

What happened under it?

Under the privatization scheme, most of the public sector undertakings have been/ are being sold to private sector.

Shifting the delivery of services performed by

public employees to private businesses.

Privatization

To promote increased efficiency.

To reduce government interference in the economy.

To improve the quality of decision making of managers

without political interference.

Profit maximization

Why Privatization????

Globalization is facilitated via WTO Process of globalization includes opening up of world trade,

internationalization of financial markets, increased mobility of persons, goods, capital, data and ideas.

Exchange of technology and knowledge, movement of labor.

In context to India, this implies opening up the economy to FDI by providing facilities to foreign companies to invest in different fields of economic activity in India.

Also allowing Indian companies to enter into foreign collaborations.

Globliazation

Foreign Direct Investment (FDI)

Foreign Institutional Investors (FIIs) have opened their office in India

India's Balance of Payments - is expected to remain comfortable

Industrial Growth

In respect of market capitalization India is in 4th position.

The number of billionaires of India has risen to 40 .

Brightside of LPG

More economic relations we have with the world and more friends we make.

Trade, hotels, transport and communication registered a growth rate of 12%

Exports grew by 18.11% during the 1st quarter of 2007-08

Services maintained a decent growth rate of 7.6%

Electricity, gas & water supply performed well and recorded an impressive growth rate of 8.3%

Environmental Degradation and Pollution

Agriculture still remains the backbone of the Indian economy

Most Priority for Exports Crops

Benefit goes to Multinational Corporations

The number of rural landless families increased .

Increasing inequality: very low and very high levels of inequality can depress the rate of growth itself.

Dark side of LPG

Second fast growing economy after China.

Growth in six core industries is 5.0% till Sept 2009.

Sensex BSE 16,152.59 NSE 4826.25

Exchange rate of rupee 46.524 against Us $

Industrial production registered a growth of 11% in Aug.2009 higher than the growth of 6.8 percent in July 2009 and also from 1.7% growth the same month last year

Current CRR is 5.75%.

Economy seen growing at 7.2% in FY10 – PM (Business line, 9 feb.)

Current state of Indian Economy

Sustaining the growth momentum and achieving an annual average growth of 9-10 % in the next five years.

China is challenge for India. over the past decade FDI flow into India have avg. 0.5% of GDP while 5% of GDP in China

Global trade

Philippines an economy 6 times smaller then us according to IMF. Sharing same global trade.

Boosting agricultural growth through diversification and

development of agro processing.

Challenge ahead Indian Economy

International confidence in India has been restored.

FDI keeping faith in Indian economy.

Investor looking India for second most promoting country after China.

Emergence of middle class with significant purchasing powers and

this has been the engine that has driven the economy.

LPG changed India's international relations.

Analysis

The agricultural sector has also seen this disproportionate growth.

Rich are just getting richer and the poor are just getting poorer.

There is a need of higher saving.

There is sparkling prosperity, there is stinking poverty

Rising inequality difficult to reduce poverty.

So we can say that:

We have everything by globalization, we have nothing by globalization.”

Trend of Stock market..

Date BSE NSE state1.01.08 20300 6144 Boom

2.06.08 16063 4739 Decline

2.03.09 8607 2674 Depression

TODAY 16152 4825 Recovery

ANALYSIS

Means:

Indian economy is back on recovery path

The economic policies and their subsequent reforms must be accompanied by suitable clauses to benefit the economically weaker sections.

Various schemes must be thoroughly scrutinized and efforts must be made to see that the rewards must reach everyone.

Then India will not only be economically prosperous, but

will forward towards its goal of “world dominance”.

Suggestion

Does LPG change your life

?

Today you're able to surf internet, buying computer, mobile phones etc.

have dozens of toothpastes, cars, bikes and many others.

LPG is giving us prosperity in one hand but showing weaknesses on the other hand.

But main thing: we are enjoying with it

so Lets give a big hand to LPG

THANKS!!!!!!!!!!!