INDIAN ECONOMY presentation bba for college.pptx

Presentation for college in pptx format

1. Shree Lal Bahadur Shastri Degree College ( Gonda ) Academic Year : 2023 Department of Business Administration Presentation on Indian Economy Presented To : Shailja Mam Presented By : Matish Upadhyay B.B.A. 2 nd Semester

2. INDIAN ECONOMY What is an Economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. Indian Economy : Mixed Economy A mixed economy combines the characteristics of capitalism and socialism. In such an economy, public and private sectors both exist, each aiming at different objectives. Private enterprises focus on making profits, while the government sector works to benefit the citizens. This coexistence of different entities helps accelerate a country’s economic growth. Economic growth & development, characteristics, Factors Affecting and Concepts of Human development

3. Economic Growth & Development What is Economic Growth Economic growth can be defined as an increase in the value of goods and services produced in an economy over a period of time. This value calculation is done in terms of % increase in GDP. What is Economic Development The term economic development can be explained as the process by which the economic well-being and quality of life of a nation, community, or particular region are improved according to predefined goals and objectives. ECONOMIC GROWTH ECONOMIC DEVELOPMENT Measured in Increase in market output results in economic growth Measured in terms of welfare values and market output It is a quantitative concept It is a qualitative concept Economic growth is uni -dimensional Economic development is multidimensional This is one of the major concern of developed countries This is a major concern of developing countries Economic growth is independent of the development Economic development can only happen if economic growth takes place. Indicators of Economic growth • Real GDP
• Real per capita income Indicators of economic development • Human Development Index • Physical Quality of Life Index • Net Economic Welfare (NEW) Difference Between Economic growth and development .

4. Characteristics of Indian Economy Factors affecting economic development Low Per Capita Real Income : The real income alludes to the normal buying force or purchasing power of the nation or the buying force or purchasing power of a person in a country in that year. Emerging nations share the quality of a low for each capita real income. High Rate of Population Growth: Where there is a high populace, There additionally must be a framework set up to help that populace. This implies there should be sufficient instructive, educational, and clinical offices, enough business openings or employment opportunities with great compensations, and so forth. High Rate of Unemployment Th e appropriate opportunities and facilities are unavailable for the high population in developing countries. Unemployment is a problem that deserves an explanation of its own because a lack of employment leads to a lack of funds for an individual and his or her family to even beget the basic necessities of life. Levels of infrastructure E.g. Transport and communication. In recent years, economic development in Central Africa has been improved due to increased investment in roads, railways and seaports. Part of this investment has come from Chinese companies who have a vested interest in transporting raw materials from Africa to China. Education Levels and standards of education have a significant influence on labour productivity. Without basic literacy and numeracy, it is difficult for an economy to develop from manual labour to new higher tech industries in the service sector. For example, good levels of education in India have given opportunities for growth in service industries, such as IT and call centres. Political stability / Law and order Political stability and the protection of private property was ranked as the most important factors for encouraging firms to invest in developing economies. Any sign of instability increases the economic and personal risk of investing in developing countries.

5. Human development What is Human development ? Human development means the process of improving people’s choices, such as education, health care, income, and empowerment. Human development covers the complete dimension of human choices from a healthy physical environment to economic, social, and political freedom. Four pillars of Human Development Empowerment Empowerment means the ability to make decisions. Increased freedom and capability to select are the sources of such power. To empower individuals, good governance and people- centered policies are essential. Empowerment of socially and economically marginalised populations is particularly important. Equity • Equity refers to ensuring that all people have access to the same opportunities.
• People must have equal access to opportunities regardless of their gender, ethnicity, income, social position, or, in India’s case, caste. However, this is not always the case, and it occurs in practically every community. Productivity •Productivity refers to human labour productivity or productivity in terms of human effort in this context.
•People’s capacities must be continually enhanced in order to maintain high levels of production. People are, in the end, a country’s most valuable resource.
As a result, efforts to improve their knowledge or provide better health facilities result in increased productivity. Sustainability •Sustainability refers to the availability of opportunities remaining constant.
•To achieve long-term human growth, each generation must have equal access to decision-making possibilities.
•Sustainable development necessitates the utilization of all environmental, financial, and human resources with the future in mind.

6. HUMAN RESOURCES OF INDIA : Co ncept of population explosion, Interrelation of population & Economic development, Population policy of India, Problem of unemployment Population Explosion It refers to the rapid increase in the population of an area among human beings. Furthermore, it is a situation where the economy is not capable of coping with the increasing demand of its population. Causes of Population Explosion • Increase in the birth rate : Due to lack of control on delivery and unawareness of people the birth rate is increasing rapidly. In addition, the gap between death and birth has gone way wider than what we can think of. Furthermore, the birth rate has increased many folds in comparison to the death rate. • A decrease in infant mortality rate : Mortality rate refers to the number of death of infants below the age of 6 months. Due to science and technology, we are able to minimize this rate and now only a few cases of death are known per thousand death. • High level of illiteracy : The literacy level of women is one of the biggest problems of family planning. In India, people pay very little importance to women’s education and marry them at an early age.

7. Positive Effects of Population Growth on Economic Development Increased entrepreneurship,
greater diversity and cultural richness,
support for social security systems through an influx of younger workers,
increased demand leading to economies of scale in production,
infrastructure development driven by urbanization, larger political influence,
increased potential for specialization and division of labor ,
faster diffusion of ideas and innovation,
and a larger pool of talent Negative Effects of Population Growth on Economic Development increased pressure on housing and infrastructure potential for increased crime and social unrest a higher risk of disease spread potential food and water shortages impacts, increased waste production and pollution challenges in managing urbanization and ensuring adequate public services potential increase in income inequality difficulty in achieving universal education and increased demand for energy resources contributing to global warming. Interrelation of population & Economic development Population growth allows for the expansion of labor and products which then grows the economy.

8. Why National Population Policy ? India’s population topped 100 crores on May 11, 2000, and if current patterns in population growth hold true, it will succeed China as the world’s most populated nation by 2045 For the promotion of sustainable development with more fair distribution, population stabilization is essential. Hence there was an immediate need for a new population policy . What is Unemployment? Unemployment is a situation when a person actively searches for a job and is unable to find work. Unemployment indicates the health of the economy. Causes of Unemployment • Large population.
•Lack of vocational skills or low educational levels of the working population. •The main cause of structural unemployment is the education provided in schools and colleges are not as per the current requirements of the industries. •The low productivity in the agriculture sector plus the lack of alternative opportunities for agricultural workers that makes transition among the three sectors difficult. NATIONAL POPULATION POLICY 2000 PROBLEM OF UNEMPLOYMENT IN INDIA Some significant features of the National Population Policy 2000 are as follows: Encourage girls to wait until they are at least 18 years of age, preferably until their 20, before getting married. Ensure that every child is immunized against every disease that can be prevented by a vaccine. Another important feature of the National population policy is to achieve complete birth, death, marriage, and pregnancy registration.

9. Economic planning in India Planning commission, Critical evaluation of current Five Year Plan Economic Planning In India – Five Year Plan The term economic planning is used to describe the long term plans of the government of India to develop and coordinate the economy with efficient utilization of resources. Economic planning in India started after independence in the year 1950 when it was deemed necessary for economic growth and development of the nation. Long term objectives of Five Year Plans in India are: • High Growth rate to improve the living standard of the residents of India.
•Economic stability for prosperity.
•Self-reliant economy.
•Social justice and reducing the inequalities.
•Modernization of the economy. Some Important Dates : Setting up of the Planning Commission : 15 March 1950 First Five Year Plan : 9 July 1951 Dissolution of the Planning Commission : 17 August 2014 Setting up of NITI (National Institution for Transforming India) Aayog : 1 January 2015

10. Economic Development : This is the main objective of planning in India. Economic Development of India is measured by the increase in the Gross Domestic Product (GDP) of India and Per Capita Income Increased Levels of Employment : An important aim of economic planning in India is to better utilise the available human resources of the country by increasing the employment levels. Self Sufficiency : India aims to be self-sufficient in major commodities and also increase exports through economic planning. The Indian economy had reached the take-off stage of development during the third five-year plan in 1961-66. Economic Stability : Economic planning in India also aims at stable market conditions in addition to the economic growth of India. This means keeping inflation low while also making sure that deflation in prices does not happen. If the wholesale price index rises very high or very low, structural defects in the economy are created and economic planning aims to avoid this. Social Welfare and Provision of Efficient Social Services : The objectives of all the five year plans as well as plans suggested by the NITI Aayog aim to increase labour welfare, social welfare for all sections of the society. Development of social services in India, such as education, healthcare and emergency services have been part of planning in India. Some Objectives of Economic Planning in India

11. Plan YEARS OBJECTIVES First five year plan 1951-1956 Overall development of agriculture Second five year plan 1956-61 Industrial development Third five year plan 1961-66 Self sufficiency in food, Economy Fourth five year plan 1969-74 Self- reliance and sustained growth Fifth five year plan 1974-79 Removal of poverty Sixth five year plan 1980-85 Improvement in infrastructure in agriculture & industry Seventh five year plan 1985-90 Modernisation and increase in employment opportunities Eighth five year plan 1992-97 Human resource development Nineth five year plan 1997-02 Rural development and decentralised planning Tenth five year plan 2002-07 Increase in investment Eleventh five year plan 2007-12 Overall development of the people Twelfth five year plan 2012-17 Sustainable development 5 years plans

12. Problems in Indian Agriculture sector Over-dependence on unreliable rain and lack of irrigation facilities had led to a decline in agricultural output. Poverty and illiteracy of the farmers prevent them from making large-scale capital investments and adopting scientific methods of cultivation. Small land holdings due to fast-growing population which leads to fragmentation of land at quick succession. As a result, the size of the plot becomes smaller with every passing generation this greatly hinders the mechanism of farming. Erosion of soil by heavy rain, floods, insufficient vegetation cover etc., reduces farm productivity. Inadequate irrigation facilities and poor management of water resources have led to a great decline in agricultural productivity.

13. A griculture development during plan period The major objectives of the First Plan in the field of agriculture were to correct the imbalances caused by partition in the supply of food grains and commercial crops and improve infrastructural facilities. In second plan period the emphasis shifted from agriculture to industry for three different reasons: (a) The smooth performance of agriculture during the First Plan period, (b) The possibility of financing economic development through foreign aid, particularly food aid, and (c) The consideration that heavy industry was the leading sector of economic development During the Third Plan the Government made greater allocation for agriculture i.e., Rs 1,745 crore compared to Rs 950 crore in the Second Plan. The main objectives of the Plan were to achieve self-sufficiency in food grains and increase in agricultural production to meet the requirements of industry and export.

14. Fourth Plan , a new orientation was imparted to agricultural policy. Modest targets were fixed for agricultural production and realistic allocations were made for agriculture and irrigation. The Plan started with a happy note Renewed emphasis was placed on agriculture in the Fifth Plan . The growth target in the agricultural and allied sectors had been fixed at 3.94 p.c. Necessary allocation was made for important programmes like minor irrigation, high- yielding varieties of seed and distribution of fertilisers. The agricultural growth pattern during the Sixth Plan period took into account the immediate as well as long-term needs of agricultural commodities—both for domestic consumption and for export. The highest priority was assigned to bridging the gap prevailing between actual and potential farm yields even at current levels of technology through the removal of existing constraints. The major programme thrusts in the Seventh Plan were: ( i ) Special rice production programmes in the Eastern region, (ii) National Oilseeds Development Projects, (iii) National Watershed Development Programme for rain-fed agriculture, and (iv) social forestry.

15. The Eighth Plan gave priority to the “growth and diversification of agriculture to achieve self-sufficiency in food and generate a surplus for exports.” Investment in agriculture, irrigation and allied sectors showed a sharp rise over the previous plans. The thrust of the Ninth Plan was to achieve agriculture-led growth. For the first time since 1960s, the Planning Commission had focused on agriculture, instead of industry, in the Ninth Plan. Tenth Plan allocation for agriculture, irrigation, etc., amounted to Rs 3,05,055 crore— an increase of 51.4 p.c. Over the Ninth Plan. It aimed at pushing up the growth rate of agriculture 2.1 p.c. On the average attained during the Ninth Plan to 4 p.c. During the entire Plan period of the Tenth Plan. The Eleventh plan places emphasis on corporate investment to boost agricultural growth. The approach paper envisages contract farming as a method of attracting corporate investment in Indian agriculture.

16. Problems Of Large Scale Industries What are Large Scale Industries? Large scale industries are referred to as those industries that are having huge infrastructure, raw material, high manpower requirements and large capital requirements. Those organisations having a fixed asset of more than 10 crore rupees are considered to be large scale industries. The growth of the economy is very much dependent on these industries. Such industries work towards bringing in foreign reserves, generating employment opportunities and paving the way for economic growth. Lack Of Capital Lack of Raw material Lack of energy Lack of technical knowledge Lack of appropriate government policy Limited Market Tata Iron and Steel Company (TISCO) : the oldest steel plant in India

17. Service Sector The service sector refers to the industry producing intangible goods, the services as output. In many countries, it is the largest and fastest-growing sector. It can be categorized into consumer, business, and public services. Examples include hospitality, education, information technology, media, and entertainment. The tertiary sector dominates the Indian economy. Liberalization and a series of
economic changes in the 1990s fuelled the rise of the service industry,
transforming an agriculture-dependent economy into one dominated by the
service industry.

18. Entrepreneurial Sector India has emerged as one of the most attractive destinations for startups in the world, with a thriving startup ecosystem that is home to more than 50,000 startups . India, one of the fastest-growing economies in the world, has seen a rapid increase in entrepreneurship in the last few years. With the rise of the internet and the government’s push for a digital economy, there has been a surge in the number of startups and entrepreneurial ventures in the country. The startup ecosystem in India is evolving at a breakneck pace, and entrepreneurs are playing a crucial role in driving economic growth and job creation in the country.

19. R ole of Commercial Bank (a) Primary Roles   Accepts deposit :  The bank takes deposits in the form of saving, current, and fixed deposits. The surplus balances collected from the firm and individuals are lent to the temporary requirements of the commercial transactions. Provides loan and advances :  Another critical function of this bank is to offer loans and advances to the  entrepreneurs and business people , and collect interest. For every bank, it is the primary source of making profits. In this process, a bank retains a small number of deposits as a reserve and offers (lends) the remaining amount to the borrowers in demand loans, overdraft, cash credit, short-run loans, and more such banks. Credit cash:  When a customer is provided with credit or loan, they are not provided with liquid cash. First, a bank account is opened for the customer and then the money is transferred to the account. This process allows the bank to create money. (b) Secondary Roles   Discounting bills of exchange:  It is a written agreement acknowledging the amount of money to be paid against the goods purchased at a given point of time in the future. The amount can also be cleared before the quoted time through a discounting method of a commercial bank. Overdraft facility:  It is an advance given to a customer by keeping the current account to overdraw up to the given limit.   Purchasing and selling of the securities:  The bank offers you with the facility of selling and buying the securities. Locker facilities:  A bank provides locker facilities to the customers to keep their valuables or documents safely. The banks charge a minimum of an annual fee for this service. Paying and gathering the credit :  It uses different instruments like a promissory note, cheques, and  bill of exchange.

20. Role Of Financial Institutions 1 Economic Growth of the Nation : At the national level, financial institutions are subject to government regulation. They serve as an agent of the government and develop the country’s economy. For instance, following government regulations, financial institutions may extend a selective credit line with lower interest rates to assist a struggling industry in resolving its problems. 2. Capital Formation : Financial institutions offer financial services to investors who require external cash to raise their capital stocks by accepting individual savings. Investors may want financial services to carry out development plans by setting up new machinery, tools, and equipment; constructing a new facility; and purchasing new transport vehicles, among other things. Financial institutions contribute to the creation of capital in this way. 3. Regulate Monetary Supply : The financial institution assists in controlling the amount of money in the economy. These organizations keep the money supply stable and manage inflation. The Federal Reserve Bank regulates the nation’s liquidity in several ways, including adjusting repo rates, participating in open markets, and setting cash reserve ratios. To control liquidity, financial institutions participate in the purchasing and selling of government assets . 4. Banking Services : Commercial banks and other financial institutions assist their clients by offering savings and deposit services. Additionally, they provide their clients with credit options, including overdraft facilities, to meet their short-term funding needs. Additionally, commercial banks offer their clients loans such as house loans, mortgages, personal loans, and loans for schooling. 5. Pension Fund Services : Financial institutions assist people in retirement planning through the different types of investment plans they offer. A pension fund is one of these investing possibilities. Employers, banks, or other institutions contribute to the investment pool on behalf of the individual, who then receives a lump sum or monthly income upon retirement.

21. Role of Small Scale Industries Employment generation : Small scale industries are one of the best sources of employment generation in India. Employment is one of the most important factors that determines the growth of a nation. Therefore, development of small scale industries should be encouraged for the development of more employment opportunities in the nation. Less Capital Requirement : Small scale industries are less capital intensive than the large scale industries. Capital is scarce in developing countries like India and therefore, small scale industries are most suitable for maintaining the balance. Short production time : Small scale industries have a shorter production time than the large scale industries which results in flow of money in the economy. Improvement in Export : Small scale industries contribute to around 40% of the total exports done by India, which forms a significant part of the revenue earned from the exports. Small scale industries work towards increasing the forex reserves of the country that reduces the load on balance of payment of the country. Reduce the dependence of agriculture : Most of the rural population will be dependent on agriculture and this creates a burden on the agricultural sector. Small scale industries by providing employment opportunities to the rural population provides more avenues for growth and also paves way for a more arranged distribution of occupation. Small scale industries are those industries in which production, manufacturing and providing the services are executed on a small or micro scale. In a country like India, the small scale industries play a very important role in generating employment, improving the financial status of people, development of rural areas and removing the regional imbalances. Some Roles of Small scale industries

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