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Indian Economy in 2009


									Joseph Anbarasu, Visiting Professor, Department of Finance, Banking & Insurance,
Appalachian State University

Indian Economy in

 To make a general account of
  national statistics
 To identify the effects of financial
  crisis on Indian economy
 To understand the importance of
  human resource as an edge over
  other factors
 To evaluate the present scenario
2008 [January 2009]
   Population: 1.140.3
   Yearly increase: 17
   Median age: 25.1
   Average life
    expectancy: 68.6
   Average fertility
    rate: 2.7 children per
   Literacy rate: 61 per
   Population in rural
2008 [January 2009]
   Population living on
    less than $1 a day:
    300 million
   Internet users: 80
   Mobile phone
    subscribers: 200
   Telephone landlines:
    38.76 million
   GDP: $2.966 trillion US
   Unemployment rate:
    7.2 per cent
   Inflation: 7.2 per cent
    (around 4%)
   Exports: $155 billion
Impact of Crisis on Indian
Economy - bad
 Economic growth at
  7.1 per cent (2%
  down). They say it is
  “Still higher”.
 Country is feeling
  some pain of
  financial crisis
 Tourism, textiles and
  the crucial
  technology sectors
  are all suffering as
  demand from
  western countries
  dries up.
Impact of Crisis on Indian
Economy - Good
   The country's banks seem
    stable compared to their
    counterparts       in    richer
   Bollywood is thriving as
    the     stuff    of    dreams
    continues to sell even in
    hard times.
   That people in India love to
    save money
   Most      Indians     typically
    spend their entire lives
    saving for a house even if
    it takes them 20 years to
    do that. Seldom do they
    take loans [just] to finance
    their lifestyle.
   That domestic demand
    doesn't slump
Impact of Crisis on Indian
Economy - Good
   "“A lot of what India
    produces      is    for
    domestic consumption
    given the large home-
    based market. So it
    kind of hedges the
    slow down.”- Murtaza
    Haider,        Ryerson
   Indians    use    their
    savings in troubled
    times as a kind of
    informal         social
    safety net.
   It   fuels   consumer
    demand and can ease
Impact of Crisis on Indian
Economy - Ugly
   The current account deficit
    is widening.
   Foreign exchange reserves
    are depleting.
   The rupee is depreciating.
   Huge outflow of foreign
    institutional     investment
    from the equity market.
   In 2007-08, net FII inflows
    into India amounted to
    $20.3 billion. As compared
    with this, they pulled out
    $11.1 billion during the
    first         nine-and-a-half
    months of calendar year
    2008, of which $8.3 billion
    occurred over the first six-
    and-a-half      months    of
    financial    year    2008-09
Indian Economy – Ugly
   Rural poverty has been
    starkly      highlighted     in
    recent years by a horrible
    wave      of    suicides    by
    indebted farmers (16,632)
    in 2007.
   India's political leadership
    and officials are highly
    corruptive      and    selfish,
    excepting few economists
    turned politicians.
   It can be said that India
    lives in the modern world
    with             14th-century
   India     desperately      has
    name-sake roads, dungeon
    airports,     and     stinking
    seaports, even sanitation
Some Findings – For your
 There are 600 million children in
  China and India whose future
  buying power will grow at least as
  fast as their rapidly improving
 As the BRICs accumulate wealth,
  they will want to diversify their
  holdings globally. America stands
  to benefit as richly from that
  diversification as it did from
  European investment in the 19th
 China and India combined to
  produce nearly half the world's
  economic output in 1820
  compared to just 1.8% for the U.S.
 It seems that extrapolation is
  possible with this chart

    MICHAEL MILKEN in Wall Street Journal
Some Findings – For your

  Goldman Sachs did some extrapolation and came out
   with some results “the economic leaders will be in the
   future - notice China as #1 and India as #3 by 2040”.
  Michael's graph estimated the trend that from 1973 to
   2001 the US share was diminishing as India and China
   were growing rapidly.
Some Findings – For your

 India and China have over us in terms  of college
  graduates in science and math is overwhelming.
  Michael's graph estimated the trend that from 1973 to
  2001 the US share was diminishing as India and China
  were growing rapidly.
 Not every one of those graduates according to the
  McKinsey Global Institute is up to par with the standards
  that we have in the U.S. (10% in China and 25% in India)
Some findings - Human
Development Index
The Human Development Report
  for 2007-08 has been
  released by the UNDP and
  there are few surprises.
 # India’s human development
  index (HDI) of 0.619 puts it
  just below Equatorial Guinea
  (0.642) and Solomon Islands
 # India’s life expectancy of
  63.7 years is sandwiched
  between Comoros (64.1) and
  Mauritania (63.2), while
  Malawi and Rwanda have
  higher adult literacy than
 India was ranked 126 by the
  HDR 2006, a rung higher than
  the previous year’s 127.
 This year, it continues to be
  dubbed a country at medium
  level of human development.
Some findings - The human
development index gives a more
complete picture than income
Where are we?
   The human development
    index trends tell an
    important story in that
   The mid-1970s almost all
    regions have been
    progressively increasing
    their HDI score .
   East Asia and South Asia
    have accelerated progress
    since 1990.
   Central and Eastern
    Europe and the
    Commonwealth of
    Independent States (CIS),
    following a catastrophic
    decline in the first half of
    the 1990s, has also
    recovered to the level
My own Perception based on some facts

Thank You

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