Ing.Tomáš Dudáš, PhD.

Basic Information
 Population – approximately 1,16 billion

 The economy of India is the twelfth largest economy in the

world by market exchange rates and the fourth largest by
purchasing power parity (PPP) basis

 President – Pratibha PATIL

 Prime minister– Manmohan SINGH

 Transition economy– (from strong state involvement towards

free market economy)
Basic Information
Official name: Bharat Ganarajya / The
Republic of India, Indická republika
Capital: New Delhi/Dillí
Area: 3.287.263 km2 (cca 6x France)
Official languages: Hindi/English –national
communication languages, 15 official
languages
Currency: Indian rupee, INR/USD 39,68,
INR/EURO 57.81
Why is India interesting…
One of the fastest growing economies in the
world
Fast growing consumer market
Dynamic high tech sectors – IT, telecom,
pharma, biotechnology, nanotechnology
Strong support of innovation
Pro market reforms
High growth potential of rural areas
India – Basic facts
Economic history after
independence
Indian economic policy after independence was
influenced by the colonial experience and by those
leaders' exposure to socialism
Policy - protectionism, with a strong emphasis on import
substitution, industrialization, state intervention in labor
and financial markets, a large public sector, business
regulation, and central planning
„Green revolution“
Five-Year Plans of India resembled central planning in
the Soviet Union. Steel, mining, machine tools, water,
telecommunications, insurance, and electrical plants,
among other industries, were effectively nationalized in
the mid-1950s
Economic history after
independence
Result - low average growth rate from 1947–
80 that was derisively referred to as the Hindu
rate of growth, because of the unfavorable
comparison with growth rates in other Asian
countries, especially the "East Asian Tigers“

Economic reforms started in 1991 and they

continue from that time
GDP/C growth in selected countries in
southeast Asia
Main economic data - 2008
GDP – 1,21 trillion USD
GDP – 3,29 trillion USD (PPP)
GDP/c – 2 900 USD (PPP)

GDP composition (%) – 17,6-29,0-53,4

Labor force– 523,5 million
Labor force composition – 60-12-28
Main economic data - 2008
Unemployment –6,8 %
High rural unemployment
Inflation – 8,3 %

Main business partners:

Export – US 12.9%, China 11%, UAE 8.8%,
Singapore 4.1% (2008)
Import – China 11.8%, US 6.8%, Singapore 4.4%,
Germany 4.3%, Australia 4.1% (2008)
Main problems of India
 Overpopulation  1,1 billion & climbing.
 Economic development.
 Hindu-Muslim tensions.
 Gender issues  dowry killings.
 Caste bias  discrimination against
untouchables continues.
 The Kashmir dispute and nuclear
weapons.
 Political assassinations.
Main problems of India
Foreign direct investment (FDI) has been low
(flows are 0.8% of GDP, 9% of what China gets)
FDI is needed in infrastructure:
- USD 75 bn in the power sector
- USD 25 bn in telecommunications
- USD 50 bn in airports, seaports and roads

Huge investments are also needed on the

agricultural sector
 The agricultural sector still relies on the vagaries of
the monsoon.
 While the sector’s contribution to GDP is only 23%, it
still employs 60% of thepopulation.
Main problems of India
Fractious politics
Tight fiscal position
High dependence on energy imports
Investor sentiment (portfolio inflows)
Protectionism
Kashmir conflict
Religious and Maoist violence
With widening income disparity, risk of social
tensions
Rising (land and) labour costs
Water shortage, environmental degradation?
Indian corporations to
remember
ArcelorMittal

Tata

Infosys

Mahindra

…