Indian economy

the objective of this paper is to acquaint students of the BBA course with present and future of Indian Economy, and how Indian economy is influencing the business environment in Indian context.

4 units
Unit 1 will include topics on structure of Indian economy, like basic introduction of type of Indian economy, terms like Economic growth and economic development, trends in occupational pattern or distribution of national income. Change in the contribution of three sectors primary, secondary, tertiary sector. Unit II will focus on planning and economic development and focus on problems in Indian economy. Economic planning and objectives of economic planning, Industrial policy 1991, Disinvestments of public enterprises, discussion on economic problems like poverty, inequality, parallel economy, unemployment, concentration of economic power, balanced regional growth and industrial sickness

 Unit 3 this unit emphasize on foreign trade issues. We will study concept, significance, foreign exchange reserve, balance of payments, balance of trade, export import policy, FEMA, export promotion Unit 4 the last unit of the syllabus will be focusing on emerging issue like GATT< TRIMS, TRIPS, FDI, portfolio investment, foreign institutional investors.

books
I C Dhingra, Indian Economy A.N Aggarwal Indian Economy

Reference books S K mishra V.K puri Ruddar Datt

Economy definition Status of Indian economy Factors affecting the Economy Economic growth vs Economic Development Factors affecting growth and development indicators

Level of economic development

Developed nations Underdeveloped nations Developing nations

Status of Indian Economy

Developing economy Underdeveloped economy

Economic growth
Economic growth may be defined as a rate of expansion that can move an underdeveloped country from a near subsistence mode of living to substantially higher levels in a comparatively short period of time. It is a process whereby an economys gross national product increases

Economic growth is conceptualized as any one of the

a rise in GDP A rise in GNP A rise in per capita gross domestic product A rise in per capita gross national product A rise in per capita net domestic product A rise in per capita net national product the most appropriate measure for economic growth is in terms of a rise in per capita net domestic product.

 Kuznets has emphasized the importance of structural transformation while defining a countrys economic growth as a long term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity and based on advantage technology and the institutional and ideological adjustments that it demands

 This definition underlines three points 1. The sustained increase in national product per capita is a manifestation of economic growth. 2. Advancing technology provides the basis for sustained economic growth. 3. Institutional and ideological adjustments must be made.

growth and development

Growth 1.It refers to increases over time in a countrys real product per capita, GDP, GNP 2.GNP increases 3. Economic growth merely refers to a rise in output. 4. Economic growth is easy to realize by mobilizing larger resources and raising their productivity. Development 1. It is more comprehensive, it implies progressive changes in the socio economic structure of a country. 2. It is always accompanied by change in the occupational structure. 3. Economic development implies changes in technological and institutional organization of production as well as distributive pattern 4. The process of development is far more extensive.

Economic growth and economic development

Economic growth accompanied by economic development in some of the underdevelopment countries. But not always, it is quite probable that a country produces more of the same type of goods and services to keep up with a growing population. Development without growth is not possible.

India as underdeveloped economy

Indian economy is presently an underdeveloped economy. Almost all important characteristics features of an underdeveloped economy were present in the Indian economy at the time of independence and have not changed since then

low per capita income inequitable distribution of income High incidence of poverty Predominance of agriculture Rapid population growth and high dependency ratio Low level of human development Scarcity of capital Technological backwardness lack of entrepreneurs.

India-developing economy
Indian economy has shown several positive sign of development during the planning era, yet it is considered as a developing economy. The economy of India has possessed all the potential for further development.

characteristics
Planned economy Development of banking and credit facilities Increase in national income Increase in saving and investment Industrial development Increase in agricultural production Efforts to remove poverty Modern agriculture Expansion of social and economic structure

Trends in national income occupational distribution

Performance of an economy can be judged with the trend of national income of the country, particularly the changes in gross or net national product and sectoral distribution of gross or net national product. In India the national income trend are prepared by the central statistical organization ( cso)

 According to this new series, the net national product of India at 1999-2000 prices was Rs 2,04,924 crore in 1950-51 since then it has grown at a moderate rate of 4.6% per annum in the period of economic planning and stood at Rs27,67,682 crore in 2007-2008.

Per capita growth

The growth rates in per capita income and consumption, which are gross measures of welfare in general have declined in the last two years. This is a reflection of the slowdown in the overall GDP growth. While the growth in per capita income measured in terms of GDP at constant prices, has declined from a high 8.1% in 2007-08 to 3.7% in 2008-09 and then recovered to 5.3% in 2009-10.

NNP growth
During tenth plan period ( 2002-03 to 2006-07 NNP registered a growth rate of 7.8% per annum. It is far below the rates of growth of some of the east Asian countries. In both China and south korea, the national income has increased during the past two decades at rates exceeding 8.0% per annum

Contributions of different sectors to NNP

By 1981-82, agriculture and allied activities were the dominant sector in India as they accounted for 41.1% of the net domestic product. The service sector which is quite heterogeneous steadily grew over this period and by 1981-82 emerged as one of the leading sectors accounting for 35.6%of the NDP.

 Growth of service sector in this country is a positive development and it should be further encouraged as it may transform India from a agrarian economy to a modern developed economy. According to economists the future of the Indian economy rests with services-led growth.

Per capita national income

Indias per capita net national product at current prices was Rs255 in 1950-51. it rose to Rs742 in 1970-71. it rose to 5,440 in 1990-91 and to Rs 33,299 in 2007-08.