WILL THE INDIA OF 2013 BE THE INDIA OF 1991 !?

Submitted By:Group 10

Nitin Boratwar(2013179)Pallavi Gupta (2013187)

Payal Singh (2013196)Priyadarshi Tandon

Raghav Kabra

Submitted To:Prof. S. ShyamMacro Economics-Principles and Policies

1991 had one restaurant owner (Rao) and one chef (Manmohan Singh) cooking up a recipe for reform: this time no one knows who is running the show, and the government has so many cooks trying to rescue the economy!

“… in matters of economics and finance, history repeats itself, not because it is an inherent trait of history, but because we don’t learn from history and let the repeat occur.”. Singh famously inaugurated the reform era by quoting Victor Hugo: “No power on Earth can stop an idea whose time has come.” These days, however, he gives every sign of being trapped in Samuel Beckett’s absurdist play, Waiting for Godot..

YES, It Will Happen!

1991

• PM was also the Congress President.

• Gave flexibility to ministers to initiate reforms.

• Channels of communication existed between government & opposition.

• India was ready to open doors to foreign players.

2013

• PM is being remote-controlled by Sonia Gandhi.

• Government is focusing on welfare-spending reforms.

• Government has shown no inclination to engage the opposition.

• India no more friendly towards foreign players.

NO, It Won’t Happen!

1991

• Share of service sector was 41%.

• Indian financial markets were immature and shock-prone.

• Rupee overvalued by more than 20%.

• Foreign exchange reserves provide 8 months of import.

2013

• Share of service sector is now 67%.

• Markets now are deep and diverse.

• Exchange rate is market determined.

• Earlier it was only 2 months of import cover.

1991CAUSES AND CONSEQUENCES•Debt from foreign lenders•Collapse of the soviet union and gulf war•Slide in the value of Indian Rupee•Fiscal Imbalances

Solutions•Removal of license raj•Privatization•Lower tax rates•Bipartisanship among political classes

2013

CAUSES AND CONSEQUENCES

•Global forces beyond its control•Private companies have slashed investment•Restrictive labor laws and weak infrastructure•Increasing rate of Inflation•Failure to institute reforms•Less exports, more imports•Corruption

ECONOMIC IMPACT

GDP of India has risen rapidly since 1991

Currently,the economy of India is the tenth-largest in the world by nominal GDP and the third-largest by purchasing power parity (PPP).[The country is one of the G-20 major economies and a member of BRICS

At the present moment ,India is the 19th-largest exporter and the 10th-largest importer in the world

By the turn of the 21st century, India had progressed towards a free-market economy, with a substantial reduction in state control of the economy and increased financial liberalisation.

In the year 2013 , India entered a period of more anemic growth, with growth slowing down to 4.4%. Other economic problems also became apparent: a plunging Indian rupee, a persistent high current account deficit and slow industrial growth

Sectors

-> Industry and services

Industry accounts for 28% of the GDP and employs 14% of the total workforce.

-> Textile

Textile manufacturing is the 2nd largest source of employment after agriculture and accounts for 20% of manufacturing output, providing employment to over 20 million people

-> Services

India is 13th in services output. The services sector provides employment to 23% of the work force and is growing quickly, with a growth rate of 7.5%

-> Retail

Retail industry is one of the pillars of Indian economy and accounts for 14–15% of its GDP

-> Agriculture

India ranks second worldwide in farm output. India is A country of group of Villages

What should the Government Do?•Managing globalization

•Providing a stable and predictable macroeconomic environment•Promoting financial inclusions•Good governance•Bridging the infrastructure deficit•Raising productivity•Expanding employment opportunities

Contribution

• Nitin Boratwar• Introduction• Brief Comparison of 1991 and 2013 crises

• Pallavi Gupta• Slide 4,5

• Payal Singh• Slide 6,7

• Priyadarshi Tondon• Slide 8,9,10

• Raghav Kabra• Slide 11,12,13