Indian Economic Environment

Roles of different Sectors Date: 10/01/2012

Features of underdeveloped country

1. Pre-dominance of agriculture 2. Widespread poverty 3. High rate of population growth 4. Low per capita income 5. Technological backwardness 6. High levels of unemployment

7. Highly unequal income distribution 8. Low levels of human well-being 9. Low rate of capital formation 10. Weak infrastructure 11. Low participation in foreign trade Agriculture is still the main occupation in India at present 2004-05 54% of population is engaged in this sector Wide spread poverty: every third poor person in the world is an Indian Tenth plan aimed to create appx. 50 million employment opportunities

Low levels of human well-being; is measured by HDI HDI- Human Development Index

Longevity; Knowledge and Standard of Living

India stand at 126th position among 177 countries

Problems faced by Agri sector till date: a. Slow and uneven growth and rain dependency b. Lack of modern techniques c. Flaws in land reforms d. Problems related to private money lenders e. Warehousing and Marketing facilities and knowledge

India A Developing Economy

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Rise in National Income Rise in per capita income Changes in occupational distribution Growing capital based of the economy Improvement in Social Overhead Capital Development in Banking and FS

What is social overhead capital ?

Transport Facilities Irrigation Facilities Energy Education Health & Medical Facilities

Industrial Sector role in Indian economy

In any economy , industries have extremely
important role to play. They help to develop higher per capita income Exception is Middle Eastern Countries because of OIL Modernizing Agriculture and providing employment Share in GDP from 12% in 50s to 26.4% in 06/07 Manufactured goods alone contributed 72% of export earnings Raising Income of People

Enhancing further the economic growth

Meeting High-Income Demands

Industrial Sector Classification

Basis of Size Large Industries Medium Industries Small Industries hand holding Basis of End-Use Basic Goods Industries Capital Goods Intermediate Goods consumer Goods

During 1965 till 80s many issues popped up due to which industrial sector faced problems

Unsatisfactory performance of agriculture Slackening of Real Investment in Public Sector Slow down in import Substitution Narrow Market for Industrial Goods

Problems faced by Industrial Sector in India

Failure to Achieve Targets

Under-utilization of Capacity Absence of World Class Infrastructure Increasing Capital-Output Ratio High Cost Industrial Economy Inadequate employment Generation Poor performance of Public Sector Regional and Sectoral Imbalances Industrial Sickness Licensing policy of the Govt.

What will we do tomorrow

Service Sector analysis Mahalnobis Model Changing sectoral patterns in India Some interesting fact findings