NABARD STUDY NOTES -- SOCIAL AND ECONOMIC ISSUES
A Brief on India
Introduction-
India, a South Asian nation, is the seventh-largest country by area, the second-most
populous country with over 1.33 billion people, and the most populous democracy
in the world. India boasts of an immensely rich cultural heritage including
numerous languages, traditions, and people. The country holds its uniqueness in
its diversity and hence has adapted itself to international changes with poise
and comfort. While the economy has welcomed international companies to invest
in it with open arms sinceliberalization in the 1990s, Indians have been
prudent and pro-active in adopting global approach and skills. Indian villagers
proudly take up farming, advanced agriculture, and unique handicrafts as their
profession on one hand while modern industries and professional services
sectors are coming up in a big way on the other.
Thus, the country is attracting many global majors for strategic
investments owing to the presence of vast range of industries, investment
avenues, and a supportive government. Huge population, mostly comprising the
youth, is a strong driver for demand and an ample source of manpower.
Location: India lies to the north of the equator in Southern Asia
Neighbouring Countries: Pakistan and Afghanistan share political borders with India on the
West while Bangladesh and Myanmar stand adjacent on the Eastern borders. The
northern boundary comprises the Sinkiang province of China, Tibet, Nepal, and
Bhutan. Sri Lanka is another neighbouring country which is separated by a
narrow channel of sea formed by the Palk Strait and the Gulf of Mannar.
Capital: New Delhi
Coastline: 7,517 km, including the mainland, the coastlines of Andaman
and Nicobar Islands in the Bay of Bengal and Lakshadweep
Islands in the Arabian Sea.
Climate: Southern
India majorly enjoys tropical climate but northern India experiences
temperatures from sub-zero degrees to 50 degrees Celsius. Winters embrace
northern India during December to February while springs blossom in March and
April. Monsoons arrive in June and stay till September, followed by autumn in
October and November.
Area: India measures
3,214 km from north to south and 2,933 km from east to west with a total area
of 3,287,263 sq km.
Natural Resources: Coal (fourth-largest reserves in the world), iron ore, manganese,
mica, bauxite, rare earth elements, titanium ore, chromite, natural gas,
diamonds, petroleum, limestone, arable land.
Land: 2,973,190 sq km
Water: 314,070 sq km
Political Profile-
Political System and Government: The world's largest democracy
implemented its Constitution in 1950 that provided for a parliamentary system
of Government with a bicameral parliament and three independent branches: the
executive, the legislature and the judiciary. The country has a federal
structure with elected governments in States.
·
Administrative
Divisions: 29 States and 7 Union
Territories
·
Constitution: The Constitution of India came into force on
26th January 1950
·
Executive
Branch: The President of India
is the Head of State, while the Prime Minister is the Head of the government
and runs the office with the support of the Council of Ministers who forms
the Cabinet.
·
Legislative
Branch: The Federal Legislature
comprises of the Lok Sabha (House of the People) and the Rajya Sabha (Council
of States) forming both the Houses of the Parliament.
·
Judicial
Branch: The Supreme Court of
India is the apex body of the Indian legal system, followed by other High
Courts and subordinate Courts.
·
Chief
of State: President, Mr. Ram
Nath Kovind (since 25th July 2017)
·
Head
of Government: Prime Minister, Mr.
Narendra Modi (since 26th May 2014)
Demographic profile-
·
Population: 1,326,801,000
·
Population
Growth Rate: 1.2 percent (2015)
·
Religions: Hinduism, Islam, Christianity, Sikhism,
Buddhism, Jainism
·
Languages: Hindi, English and at least 16 other
official languages
·
Literacy: Total population: 74.04 per cent
(provisional data-2011 census)
·
Male: 82.14 percent
·
Female: 65.46 percent
·
Suffrage: 18 years of age; universal
·
Life
expectancy: 66.9 years (men),
69.9 years (women) (2015 – WHO 2016 Report)
Economic Profile
Indian Economy-
·
India’s GDP is estimated
to have increased by 7.2 percent in 2017-18 and 7 percent in 2018-19. Gross
Value Added (GVA) Composition by Sector (2017-18 2nd Advance Estimate)
·
Services: 53.9 percent
·
Industry: 29.1 percent
·
Agriculture: 17.1 percent
·
Forex
Reserves: US$ 405.64 billion in
the week up to March 15, 2019.
·
Gross
Fixed Capital Formation (GFCF) at current prices: Gross Fixed Capital Formation (GFCF) at
current prices is estimated to be Rs 40.61 trillion (US$ 587.09 billion)
between Apr-Dec 2019.
·
Value
of Exports: India's exports stood at
US$ 483.92 billion in 2018-19 (up to February 2019.
·
Export
Partners: US, Germany, UAE, China,
Japan, Thailand, Indonesia, and the European Union. India is also tapping newer
markets in Africa and Latin America.
·
Currency
(code): Indian rupee (INR)
·
Exchange
Rates: Indian rupees per US
dollar - 1 USD = 69.1713 INR (March 29, 2019)
·
Fiscal
Year: 01st April to 31st
March
Cumulative FDI Equity Inflows: US$ 409.15 billion (April 2000 to December
2018)
Share of Top Investing Countries FDI Equity Inflows: Mauritius (32 per cent), Singapore (19 per
cent), Japan (7 per cent), UK (6 per cent), Netherlands (6 per cent), USA (6
per cent), Germany (3 per cent), Cyprus (2 per cent), France (2 per cent), UAE
(1 per cent)
Major Sectors Attracting Highest FDI Equity Inflows: Services
Sector (17 per cent), Computer Software and Hardware (9 per cent),
Telecommunications (8 per cent), Construction Development (6 per cent), Trading
(5 per cent), Automobiles (5 per cent), Drugs and Pharmaceuticals (4 per cent),
Chemicals (4 per cent), Construction Activities (4 per cent), Power (3 per
cent)
Transportation in India
·
Airports: Airports Authority of India (AAI) manages 129
airports in the country, which includes 23 international airports and 20 civil
enclaves at defence airfields.
·
International
Airports: Ahmedabad,
Amritsar, Bengaluru, Chennai, Goa, Guwahati, Hyderabad, Kochi, Kolkata, Mumbai,
New Delhi, Thiruvananthapuram, Port Blair, Srinagar, Jaipur, Nagpur, Calicut.
·
Railways: The Indian Railways network is spread over
108,706 km, with 12,617 passenger and 7,421 freight trains each day from 7,172
stations plying 23 million travellers and 3 million tonnes (MT) of freight
daily.
·
Roadways: India’s road network of 4.87 million km is the
second largest in the world. With the number of vehicles growing at an average
annual pace of 10.16 percent, Indian roads carry about 65 percent of freight
and 85 percent of passenger traffic.
·
Waterways: 14,500 km
·
Major
Ports of Entry: Chennai, Ennore, Haldia,
Jawaharlal Nehru Port Trust (JNPT), Kolkata, Deen Dayal, Kochi, Mormugao,
Mumbai, New Mangalore, Paradip, Tuticorin, and Vishakhapatnam.
Chapter-02
Growth and Development
(About Indian Economy Growth Rate &
Statistics)
Introduction
The two words ‘growth’ and ‘development’ were
often used interchangeably in economic discussion. As soon as ‘development economics’
emerged as a distinct field of study after the World War II, it ‘had the
appearance of being a bastard child of growth economics’ and, in fact, this
child did not differ from what could be expected from a genuine ‘son of growth
economics’. But, technically speaking, they are not the same.
Economic growth is defined in positive terms. It is measured by
the sustained increase in real, national or per capita income of a nation over
time. Economic growth is usually measured in terms of an increase in real GNP
or GDP over time or an increase in income per head over time. Growth
is desirable as it enables a society to consume more goods and services.
That is why growth is considered to be the basis of advancing real
living standards or human welfare. At the same time, it is also true that
growth does not necessarily lead to an increase in human welfare. Economic development
is more fundamental than economic growth.
India has emerged as the fastest growing major economy in the
world and is expected to be one of the top three economic powers of the world
over the next 10-15 years, backed by its strong democracy and
partnerships.
Market size-
India’s GDP is estimated to have increased by 7.2 percent in
2017-18 and 7 percent in 2018-19. India has retained its position as the third
largest startup base in the world with over 4,750 technology start-ups.
India's labour force is expected to touch 160-170 million by 2020,
based on the rate of population growth, increased labour force participation,
and higher education enrolment, among other factors, according to a study by
ASSOCHAM and Thought Arbitrage Research Institute.
India's foreign exchange reserves were US$ 405.64 billion
in the week up to March 15, 2019, according to data from the RBI.
Recent Developments-
With the improvement in the economic scenario, there have been
various investments in various sectors of the economy. The M&A activity in
India reached record US$ 129.4 billion in 2018 while private equity (PE) and
venture capital (VC) investments reached US$ 20.5 billion. Some of the
important recent developments in the Indian economy are as follows:
·
During
2018-19 (up to February 2019), merchandise exports from India have increased 8.85 percent
year-on-year to US$ 298.47 billion, while services exports have grown 8.54
percent year-on-year to US$ 185.51 billion.
·
Nikkei
India Manufacturing Purchasing Managers’ Index (PMI) reached a 14-month high in February 2019
and stood at 54.3.
·
Net direct tax
collection for 2018-19 had crossed Rs 10 trillion (US$ 144.57 billion) by March
16, 2019, while goods and services tax (GST) collection stood at Rs 10.70
trillion (US$ 154.69 billion) as of February 2019.
·
Proceeds through Initial
Public Offers (IPO) in India reached US$ 5.5 billion in 2018 and US$ 0.9
billion in Q1 2018-19.
·
India's Foreign Direct
Investment (FDI) equity inflows reached US$ 409.15 billion between April 2000
and December 2018, with maximum contribution from services, computer software,
and hardware, telecommunications, construction, trading, and automobiles.
·
India's Index of
Industrial Production (IIP) rose 4.4 percent year-on-year in 2018-19 (up to
January 2019).
·
Consumer Price Index
(CPI) inflation stood at 2.57 percent in February 2019.
·
Net employment
generation in the country reached a 17-month high in January 2019.
Government Initiatives-
The interim Union Budget for 2019-20 was announced by Mr. Piyush Goyal, Union
Minister for Finance, Corporate Affairs, Railways and Coal, Government of
India, in Parliament on February 01, 2019. It focuses on supporting the needy
farmers, economically less privileged, workers in the unorganized sector and
salaried employees while continuing the Government of India’s push towards
better physical and social infrastructure.
Total expenditure for 2019-20 is budgeted at Rs 2,784,200
crore (US$ 391.53 billion), an increase of 13.30 percent from 2018-19
(revised estimates).
Numerous foreign companies are setting up their facilities in
India on account of various government initiatives like Make in India and
Digital India. Mr. Narendra Modi, Prime Minister of India, has launched the
Make in India initiative with an aim to boost the manufacturing sector of
Indian economy, to increase the purchasing power of an average Indian consumer,
which would further boost demand, and hence spur development, in addition to
benefiting investors. The Government of India, under the Make in India
initiative, is trying to give a boost to the contribution made by the
manufacturing sector and aims to take it up to 25 percent of the GDP
from the current 17 percent. Besides, the Government has also come up
with the Digital India initiative, which focuses on three core components: the
creation of digital infrastructure, delivering services digitally and to
increase digital literacy.
Some of the recent initiatives and developments were undertaken by
the government are listed below:
·
In
February 2019, the Government of India
approved the National Policy on Software Products – 2019, to
develop the country as a software hub.
·
The National
Mineral Policy 2019, National Electronics Policy 2019 and Faster
Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME II) have
also been approved by the Government of India in 2019.
·
Village electrification
in India was completed in April 2018. Universal household
electrification is expected to be achieved by March 2019 end.
·
The Government of India
released the maiden Agriculture Export Policy, 2018 which
seeks to double agricultural exports from the country to US$ 60 billion
by 2022.
·
Around 1.29 million
houses have been constructed up to December 24, 2018, under
Government of India’s housing scheme named Pradhan Mantri Awas Yojana
(Urban).
·
Prime
Minister's Employment Generation Programme (PMEGP) will be continued with an outlay of Rs
5,500 crore (US$ 755.36 million) for three years from 2017-18 to 2019-20,
according to the Cabinet Committee on Economic Affairs (CCEA).
Road Ahead-
·
India's gross domestic
product (GDP) is expected to reach US$ 6 trillion by Financial Year
2027 and achieve upper-middle income status on the back of
digitisation, globalization, favourable demographics, and reforms.
·
India's revenue receipts
are estimated to touch Rs 28-30 trillion (US$ 385-412 billion) by
2019, owing to Government of India's measures to strengthen
infrastructure and reforms like demonetization and Goods and Services Tax
(GST).
·
India is also focusing
on renewable sources to generate energy. It is planning to achieve 40 percent
of its energy from non-fossil sources by 2030 which is
currently 30 percent and also have plans to increase its renewable energy
capacity from to 175 GW by 2022.
·
India is expected to be
the third largest consumer economy as its consumption may triple to US$
4 trillion by 2025, owing to shift in consumer behaviour and
expenditure pattern, according to a Boston Consulting Group (BCG) report; and
is estimated to surpass USA to become the second largest economy in terms of purchasing
power parity (PPP) by the year 2040, according to a report by
PricewaterhouseCoopers.
Exchange Rate Used: 1 United States Dollar
equals to 69.46 Indian Rupee (as on 11th June 2019)
THANKS BANKERSADDA.COM.
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