indian economy and its sectors

1. Indian Economy
Glen Furtado - 25
Niffson Gonsalves - 27
Anson Andrews - 28
Kshitija Jadhav - 29
Vishtasp Jokhi - 30
Jitesh Karamchandani - 31
Kaushik Thakurdwarkar - 32

2. Contents & Crew
• A Brief Introduction – Vishtasp Jokhi
• History – Glen Furtado
• Sectors – Jitesh Karamchandani
• External Trade and Investment – Kshitija
Jadhav
• Currency – Niffson Gonsalves
• Income and Consumption – Kaushik
Thakurdwarkar
• Economic Trends and Issues – Anson
Andrews

3. Understanding the Topic
• Indian – is this post 1947?
• Economy –
– Thrifty management; frugality in the expenditure or
consumption of money, materials, etc.
– The management of the resources of a community,
country, etc., especially with a view to its productivity.
– The prosperity or earnings of a place.

4. Status
• The Indian Economy is termed as a
developing economy which is a polite term for
an underdeveloped economy
• What are the features of a developing
economy

5. History (Pre 1947)
• The known Economic history of
India begins with the Indus Valley civilization
• From 300 B.C. to 1200 A.D. the Maurya
Empire united most of the Indian
subcontinent. The political unity and
military security allowed for a common
economic system and enhanced trade
and commerce. During this period India
is estimated to have had the largest
economy of the ancient and medieval
world.

6. History (Post 1947)
• India has followed central planning for most
of its independent history, which have
included extensive public ownership,
regulation, red tape, and trade barriers.
• After the 1991 economic crisis, the central
government launched economic
liberalization. India has turned towards a
more capitalist system and has emerged as
one of the fastest growing large economies of
the world.

7. Sectors
Basic
• Primary –
dependency on
natural resources
(agriculture,
fishing)
• Secondary –
dependency on
manufacturing
• Tertiary –
Other
• 1.Public
• 2.Private
• 3.Organised
• 4.Unorganised

8. External Trade & Investment
(1)
• Trade
– International (external) trade is the
exchange of capital, goods,
and services across international
borders or territories.
– Increasing international trade is crucial to
the continuance of globalization. Without
international trade, nations would be
limited to the goods and services
produced within their own borders.

9. External Trade & Investment
(2)
• Investment
– Foreign direct investment (FDI) is direct
investment into production in a country by
a company located in another country.
– Foreign direct investment is done for many
reasons

10. Currency
• In economics, currency is a generally
accepted medium of exchange. These are
usually the coins and banknotes of a
particular government, which comprise the
physical aspects of a nation's money supply.
• The Indian rupee is the official currency of
the Republic of India. Its issuance is
controlled by the Reserve Bank of India.

11. Income & Consumption
• There is a direct relationship between
income and consumption.
• In most cases it is directly proportional
and in some special cases it is inversely
proportional (This is true in the case of
inferior goods)

12. Economic Trends & Issues (1)
• Agriculture
A classic dilemma - it is the cause of success
and the root of all failure.
– Irrigation
– Unviable land holdings
– Scams
– Subsidies

13. Economic Trends & Issues (2)
• Corruption
– A 2005 study by Transparency
International (TI) found that more than half
of those surveyed had firsthand
experience of paying bribe or peddling
influence to get a job done in a public
office in the previous year.
– In 2011, TI ranked India at 95th place
amongst 183 countries in perceived levels
of public sector corruption.

14. Economic Trends & Issues (3)
• Infrastructure
– In the past, development of infrastructure
was completely in the hands of the public
sector and was plagued by slow progress,
poor quality and inefficiency.
– While 80% of Indian villages have at least
an electricity line, just 44% of rural
households have access to electricity.
Around 40 to 50% of the electricity is
stolen, compared with 3% in China. The
stolen electricity amounts to 1.5% of GDP.

15. Economic Trends & Issues (4)
• Education
– India has made huge progress in terms of
increasing primary education attendance
rate and expanding literacy to
approximately three-fourth of the
population.
– However, the literacy rate of 74% is still
lower than the worldwide average and the
country suffers from a high dropout rate.

16. HISTORY OF INDIAN ECONOMY

17. STAGES OF INDIAN ECONOMY
• Pre-Colonial period (Medieval India)
• Colonial period (Modern India)
• Post-Independence period

18. Pre Independent India

19. Indus Valley
Civilization
• Flourished between 2800 BC and
1800 BC
• Agriculture, Animal Husbandary
• Used tools and weapons
• Import-Export Trade
• Perfect Urban planning

20. Pre-Colonial
Period
• In 1600, During Akbar’s reign in the
Mughal Empire the revenue reached
upto 1500M Rs whereas Britain at that
time totaled just £16M
• After the fall of the Mughals, India was
administered by Maratha Empire and
the revenue of India was just 100M Rs
• After the loss of Panipat, it reduced to
30M Rs
Assessment of India's
pre-colonial economy
is mostly qualitative,
owing to the lack of
quantitative
information

21. Colonial Period
• Taxation Environment
• Institutional
Environment
• Standardized Weights
• Capital Markets
• Developed system of
Railways and
Telegraphs
• Single currency with
fixed exchange rates
• Colonial rule brought a major
change in the taxation
environment from revenue taxes
to property taxes
• At the end of colonial rule, India
inherited an economy that was
one of the poorest in the
developing world

22. SECTORS OF THE INDIAN
ECONOMY
Primary Sector
Secondary Sector
Tertiary Sector
Other Sectors
• Organized Sector
• Unorganized Sector:
• Public Sector
• Private Sector

23. Primary Sector
• The economic activity depends mainly on
exploitation of natural resources .
• Agriculture and agriculture related
activities, forestry and fishing, mining, and
extraction of oil and gas.
• A larger sector in developing countries

24. Secondary Sector
• Involves manufacturing
• The industrial production of physical
goods .

25. Tertiary Sector
• Involves providing intangible goods like
services,attention, advice, experience, and
discussion.
• Financial services, management
consultancy, telephony and IT are good
examples of service sector.

26. Interdependency of Sectors
• example of a cold drink.

27. Organized Sector
• Carries out all activity through a system
following the laws
• Benefits like provident fund, leave ,
medical benefits and insurance are
provided to workers

28. Unorganized Sector:
• Evades most of the laws and don’t follow
the system
• Small shopkeepers, some small scale
manufacturing units keep all their
attention on profit making and ignore their
workers basic rights.
• Workers don’t get adequate salary and
other benefits like leave, health benefits
and insurance

29. Public Sector
• Companies which are run and financed by
the Government comprise the public
sector.
• Government had to start creating big
public sector enterprises like SAIL (Steel
Authority of India Limited), ONGC(Oil &
Natural Gas Comission).

30. Private Sector
• Companies which are run and financed by
private people comprise the private sector.
• Companies like Hero Honda, Tata are from
private sectors.

34. EXTERNAL TRADE AND INVESTMENT

35. What is External Trade?
Exchange of capital, goods, and services across
international borders or territories.
In most countries it represents significant share of
gross domestic product (GDP).
Exchange of capital, goods, and services across
international borders or territories.
In most countries it represents significant share of
gross domestic product (GDP).

36. Importance Of External Trade
• International trade is exchange of capital, goods,
and services across international borders or
territories. In most countries, it represents a
significant share of gross domestic product (GDP)
• International trade is exchange of capital, goods,
and services across international borders or
territories. In most countries, it represents a
significant share of gross domestic product (GDP)

37. • International trade is the backbone of our
modern, commercial world, as producers in
various nations try to profit from an expanded
market, rather than be limited to selling within
their own borders.
• International trade is the backbone of our
modern, commercial world, as producers in
various nations try to profit from an expanded
market, rather than be limited to selling within
their own borders.

38. Rise in external trade

39. India Trade: Imports
• India’s major imports comprise of crude oil
machinery, military products, fertilizers,
chemicals, gems, antiques and artworks.
Imported goods are divided into the
following categories: Freely importable
items: For these items, no import license is
required. They can be freely imported by
an individual or a firm. Canalized items:
These items can only be imported by public
sector firms. For example petroleum
products fall under this category. Prohibited
items: Items such as unprocessed ivory,
animal rennet and tallow fat cannot be
exported to India.

41. India Trade: Exports
• Indian exports comprise mainly of engineering
and textile products, precious stones,
petroleum products, jewelry, sugar, steel
chemicals, zinc and leather products. Most of
the exported goods are exempt from export
duties. India also exports services to several
countries, primarily to the US. In fact, India is
among the world’s largest exporters of services
related to information and communication
technology (ICT). It is also the key destination
for business process outsourcing (BPO).

43. Risks in international trade
• Buyer insolvency; Non-
acceptance; Credit risk;
Regulatory risk; Intervention;
Political risk; and War and other
uncontrollable events. In addition,
international trade also faces the
risk of unfavorable exchange rate
movements

44. HISTORY OF RUPEE
• The first rupee was introduced by Sher Shah
Suri (1486-1545) based on a ratio of 40
copper pieces (paisa) per rupee.The name was
derived from the Sanskrit word raupya,
meaning silver.
• During British rule, and the first decade of
independence, 1 damidi(pie)=0.520833paise,
1 kani(pice) =1.5625paise, 1 paraka
=3.125paise, 1 anna =6.25paise, 1 beda
=12.5paise, 1 pavala =25paise, 1 artharupee
=50paise, 1 rupee =100paise

45. HISTORY OF INDIAN
RUPEE
• In 1957, decimalisation occurred and the
rupee was divided into 100 naye paise
(Hindi for "new paise"). In 1964, the initial
"naye" was dropped. Many still refer to 25,
50 and 75 paise as 4, 8 and 12 annas
respectively.

46. BANK NOTES
• In 1861, the Government of India
introduced its first paper money, 10 rupee
notes. These were followed by 20 rupee
notes in 1864, 5 rupees in 1872, 10,000
rupees in 1899, 100 rupees in 1900, 50
rupees in 1905, 500 rupees in 1907 and
1000 rupees in 1909.
• The Reserve Bank of India began note
production in 1938, issuing 2, 5, 10, 100,
1000 and 10000 rupee notes.

47. • After independence, new designs were
introduced to remove the portrait of the King.
• The 5000 and 10,000 rupee notes introduced
in 1949.
• In the 1970s, 20 and 50 rupee notes were
introduced but denominations higher than 100
rupees were demonetized in 1978.
• In 1987, the 500 rupee note was introduced,
followed by the 1000 rupees in 2000.
INDIAN RUPEEINDIAN RUPEE

48. BANK NOTES
• The current series, which began in 1996, is
called the Mahatma Gandhi series. Currency
notes are printed at the Currency Note Press,
Nashik, Bank Note Press, Dewas, Bharatiya
Note Mudra Nigam (P) Limited presses at
Salboni and Mysore and at the Watermark
Paper Manufacturing Mill, Hoshangabad.

49. <
Value Dimensions Main Color
Date of
issue
Obverse Reverse
Rs. 5 117 × 63 mm Green
Mahatma Gandhi
Tractor 2002
Rhinoceros, elephant, tiger 1996
Rs. 10 137 × 63 mm Orange-violet
Palm trees 2002
Rs. 20 147 × 63 mm Red-orange
Parliament of India 1997
Rs. 50 147 × 73 mm Violet
Himalaya Mountains 1996
Rs. 100 157 × 73 mm Blue-green at centre, brown-purple at 2 sides
Dandi March 1997
Rs. 500 167 × 73 mm Olive and yellow
Economy of India 2000
Rs. 1000 177 × 73 mm Amber-Red
SPECIFICATIONS OF CURRENT INDIAN CURRENCY NOTESSPECIFICATIONS OF CURRENT INDIAN CURRENCY NOTES
Description

50. LANGUAGE PANELS
• Each banknote has its
amount written in 17
languages (English &
Hindi on the front, and
15 others on the back)
illustrating the diversity
of the country

51. SECURITY FEATURES IN
CURRENCY NOTES
• Watermark — White side panel of
notes has Mahatma Gandhi
watermark.
• Security thread — All notes have a
silver security band with
inscriptions visible when held
against light.
• Latent image — Higher
denominational notes display
note's denominational value in
numerals when held horizontally at
eye level.
• Microlettering — Numeral
denominational value is visible
under magnifying glass between

52. SECURITY FEATURES IN
CURRENCY NOTES
• Fluorescence — Number panels glow under
ultra-violet light.
• Optically variable ink — Notes of Rs. 500 and
Rs. 1000 have their numerals printed in
optically variable ink. Number appears green
when note is held flat but changes to blue
when viewed at angle.
• Back-to-back registration — Floral design
printed on front and back of note coincides
when viewed against light.

53. COINS
• India's first coins after independence were issued in
1950. They were 1 pice, ½, 1 and 2 annas, ¼, ½
and 1 rupee denominations.
• The first decimal issues of India consisted of 1, 2, 5,
10, 25 & 50 naye paise, as well as 1 rupee. The 1
naya paisa was bronze, the 2, 5 & 10 naye paise
were cupro-nickel & the 25 & 50 naye paise & 1
rupee were nickel.
• In 1964, the word naya(e) was removed from all the
coins. Between 1964 & 1967, aluminum 1, 2, 3, 5 &
10 paise were introduced. In 1968, nickel-brass 20
paise were introduced, replaced by aluminum coins
in 1982.

54. COINS
• Between 1972 & 1975, cupro-nickel replaced nickel
in the 25 & 50 paise as well as the 1 rupee. In
1982, cupro-nickel 2 rupees coins were introduced.
In 1988, stainless steel 10, 25 & 50 paise were
introduced, followed by 1 & 5 rupee coins in 1992.
• Between 2005 & 2008, new, lighter 50 paise, 1, 2 &
5 rupee coins were introduced, all struck in ferritic
stainless steel. The move was prompted by the
melting down of older coins whose face value was
less than their scrap value
• The coins commonly in circulation are 1, 2, 5 & 10
rupees. Although they remain valid, paise coins
have become increasingly rare in regular usage.

55. SPECIFICATIONS OF CURRENT CURRENCY
COINS
Value
Technical parameters Description Date of
Diameter Mass Composition Shape Obverse Reverse
First
minting
Last
minting
5 p
22 mm
(diagonal)
1.5 g Aluminium Diamond Emblem of India Value 1957 1994
10 p 16 mm 2 g
Ferritic stainless
steel
Circular Emblem of India Value 1961 1998
25 p 19 mm 2.83 g
Ferritic stainless
steel
Circular
Emblem of India,
value
Rhinoceros 1988 2002
50 p 22 mm 3.79 g
Ferritic stainless
steel
Circular
Emblem of India,
value
Value, Hand showing
clenched fist
2008 -
1 ` 25 mm 4.85 g
Ferritic stainless
steel
Circular
Emblem of India,
value
Value, Hand showing
thumb
2007 -
2 ` 27 mm 5.62 g
Ferritic stainless
steel
Circular Emblem of India
Value, Hand showing 2
fingers
2007 -
5 ` 23 mm 6 g
Ferritic stainless
steel
Circular Emblem of India Value, wavy lines 2007 -
10 ` 28 mm 8 g Bimetallic Circular ? Value, wavy lines 2009 -

56. MINT MARKS ON
COIN
• Coins with a ‘Diamond’ mark below the date
is produced in Mumbai mint
• Coins with no marks below the date is
produced in Kolkata mint.
• Coins with ‘Split Diamond’ or ‘Dot’ or ‘Star’
below the date is produced in Hyderabad
Mint.
• Coins with Round Dot below the date is
produced in Noida Mint.
• Coins having other marks is produced in
Foreign Mints

57. INDIAN
RUPEE SYMBOL
• The currency is at present denoted simply by
“Rs” or “INR” which is short for Indian rupee,
but these are not “symbols” but
“abbreviations” for the word rupee.
• On 15th of July 2010 cabinet, finalized the
design for the Rupee.
• An engineer, IIT post-graduate Uday Kumar
has been honored. His design out of five
shortlisted ones is selected for the new symbol
of the Indian Rupee.

58. NEW INDIAN
RUPEE SYMBOL
• New Rupee Symbol of India - How to use in
Computers?
• Download the font. -> ”Rupee_Foradia.ttf”
• Save it to fonts folder of your PC: Location :
• C:/Windows/Fonts and then go to the
C:/Windows/Fonts location and install (double click)
• Open your word processor and select the
“Rupee_forindian”.
• Just select “Rupee” font from the drop down list of
your fonts in your application and press the key just
above your tab button. It will display the new Rupee
symbol of India.

62. Handle the currency carefully
And
Be a proud Indian

63. Income and consumption
What is national income ?
• National income measures the
total value of goods and services
produced within the economy
over a period of time
• National Income can be denoted
in different ways with different
meaning attached to it.
Gross Domestic Product (GDP)
Gross National product (GNP)
Net National Product (NNP)

64. • The GDP of India has grown from a merge
93.7 billion rupees in 1950 to about
410006.4 billion rupees in 2006.
• India's per capita income (nominal) is $
1219, ranked 142nd in the world, while its
per capita purchasing power parity (PPP)
of US $3,608 is ranked 129th.

66. FDI in India
• FDI : Investment by a company in
a country other than that in which
the company is based.
• Is FDI beneficial for India ?

67. Strengths of INDIAN
ECONOMY
Demographics of
India are
favorable.
India is well
placed to benefit
from globalization
and outsourcing.
There is much
scope for
increases in
efficiency.

68. Problems faced in Indian
Economy
Inflation.
Poor educational
standard.
Poor Infrastructure.
Balance of payment
deterioration
High level of debt
Large budget deficit
Rigid labour laws

69. High Fiscal Deficit
What is the reason: 200% rise in
subsidies since 2007-08
• What can be done: Speed up Aadhar pilots;
use study results to shift to direct transfer of
subsidies across India
Scrap diesel & urea subsidies, decontrol diesel

70. High Current Account Deficit
What is the reason: Likely at 4% of GDP in last
fiscal year
• What can be
done: Controlling
fiscal deficit will curtail
current account deficit
Restore distribution
margins on financial
saving products, to
curb demand for gold

71. High Inflation
What is the reason: 7.23% & rising; still
above comfort level
• What can be
done: Ease supply
constraints by
removing APMC Act
and opening up retail
sector to FDI

72. Statistics
Country Inflation rate
Brazil 6.3
India 8.8
China 5.4
Indonesia 6.7
Russia 9.4
South Africa 4.1

73. Rupee Depreciation
What is the reason: 20% drop in rupee against
dollar since early 2011
• What can be
done: Overseas
bonds are an
option Clear FDI
decisions quickly

74. High Interest Rates
What is the reason: 8% repo rate against 5% in
March 2010
• What can be
done: Strong
commitment to fiscal
consolidation will
help the Reserve
Bank cut rates

75. Drop in Investments
What is the reason: 29.5% of GDP, gross fixed capital
formation, lowest in seven years
• What can be
done: Clarity on coal
can kickstart power
investments
Get cash-rich PSUs to
fast-track plans

76. Power Sector Crisis
What is the reason: 30000MW Rs 47,738cr power plant
idling or underutilised
• What can be
done: Supply coal to
plants working at sub-
optimal capacity
Revamp state
electricity boards to
ensure power
producers can sell to
them without payment
worries

77. Poverty due to Population
• Rural population
• Urban population

78. Antipoverty Programmes
• National Rural
Employment
• Rural Labour
Employment
Generation
Programme
• Jawahr Rozgar
Yojana

79. Types of Unemployment
• Involuntary
unemployment
• Voluntary
unemployment

80. Measures to promote
Employment
• Rural works
programme
• Marginal farmers
and Agricultural
Labourers