COMPARITIVE

ECONOMIC ANALYSIS

INDIA & SPAIN

SUBMITTEDXBY:
DIKSHA LATH- 19pgdm-bhu023
MANISHA KHAITAN- 19pgdm-bhu035
PRATYUSH RATHA- 19pgdm-bhu47
SAUVIK SAHA- 19pgdm-bhu60
SUMIT Kumar- 19pgdm-bhu074
WE HAVE COMPARED ECONOMIC ANLAYSIS OF INDIA AND SPAIN
USING FOLLOWING MACROECONOMIC PARAMETRES:


1. INFLATIONi
2. EMPLOYMENTh
3. INTERNATIONAL TRADEu
4. PUBLIC FINANCEe
5. GDPqGROWTH







































1. INFLATIONi

As peripopular definitions is the rate a price rises, and essentially with
regards to purchasing, what is the worth of the rupee at a given
timeframe.. Inflation rate is the rise in levels of prices, goods and services
in an economy and its effects on the cost of living in a nation. It
influences the interest rates and mortgage rates but also has a bearing on
levels of state pensions and benefits received. It is also viewed as the
most promising economic determinant of a nation.

1.1 Spain
In Spain the most important categories in CPI are food and non-alcoholic
beverages, housing and utilities and hotels, transport, cafes and restaurants. It
also includes recreation and culture, clothing and footwear, miscellaneous
goods and services. Furnishing, health, communication, tobacco and alcoholic
beverages, household equipment and routine maintenance of the house,
education are account for CPI. (In 2013 inflation rate was 1.4%. which will be
used to compute annual change for FY 2014)

Financial Year Inflation Rate ( in % ) Annual Change ( in %)

(Approx) (Approx)
2014 -0.15 -1.6
2015 -0.500 -0.35
2016 -0.203 0.30
2017 1.96 2.16
2018 1.68 -0.28
2019 (October) 0.12 -1.56
Graphical Representations

Graph A
3
1.96 1.68
2
Inflation Rate

1
0.12
0
2014
-0.15 2015 2016 2017 2018 2019
-0.5 -0.203
-1 (October)
Financial Year

Graph B
2.5 2.16

2
1.5
1
Annual change

0.3
0.5
-0.35 -0.28
0
2014 2015 2016 2017 2018 2019
-0.5
(October)
-1 -1.6 -1.56
-1.5
-2
Financial Year

1.2 India
Inflation rate of India rose to 4.62% in October 2019. In previous month it was
around 4% approximately. In India the primary component in consumer price
index is Food and beverages i.e. 45.86 percent, of which 9.67 percent goes to
cereals and products, 6.61 percent goes to Milk and products, 6.04 percent goes
to Vegetables, 5.55 percent goes to meals, snacks, 3.61 percent goes to Meat
and fish and 3.56 percent goes to Oils and fats. Miscellaneous accounts for
28.32 percent. Consumer price changes in India is very volatile due to
dependence on energy imports, the uncertain impact of monsoon rains,
difficulties in transporting food items to market because of its roads and
infrastructure.
Here are the mentioned inflation rates along with the annual change:

Financial Year Inflation Rate ( in % ) Annual Change ( in %)

(Approx) (Approx)
2014 6.35 -4.5
2015 5.9 -0.45
2016 4.9 -1
2017 2.5 -2.4
2018 4.87 2.37
2019 (October) 4.62 -0.25

Graphical Representations

Graph C
3
2
1
Financial Year

0
-1 2014 2015 2016 2017 2018 2019
(October)
-2
-3
-4
-5
Annual Change in Inflation rates

Graphical comparison between Spain and India taking

Annual Change in inflation rate as a parameter.
 3
2
1
Annual Change

0
1 2 3 4 5 6
-1
-2
-3
-4
-5
Financial Year

India Spain

As we see currently the annual change in inflation rates of both the countries have
taken a major dip. Further over the span of years taken into record we do not
observe linear representation but there is an abundance of non-uniformity.

2. EMPLOYMENTX
Business rates are characterizedXasXa proportion of the degree to which
accessible work assets (individuals,accessible to work) are being utilized. They are
determined as the proportion of the utilized to the working age,populace. Work
rates are touchy to the,monetary cycle, ,yet in the more drawn out term they are
fundamentally,influenced by governments' advanced,education and salary bolster
approaches and by strategies that encourage work of ladies and burdened
gatherings. Utilized individuals are those matured 15 or over who,report that they
have worked,in beneficial,work for no less than one hour in the earlier week or
who had a,ocation yet were missing,from work amid the reference week. The
working age populace alludes to individuals matured 15 to 64. This pointer is
occasionally,balanced,and it is estimated as far as thousand,people matured.
India has the,42nd-most noteworthy business rate (53.3%) among all nations on the
planet. The,measurement demonstrates the,joblessness,rate in India from,2007,to
2018.

2.1 Employment,Rate,in,IndiaX
India,has,the,42nd-highest,employment,rate, (53.3%) among all countries in the
world. ,The statistic shows the joblessness rate in India from 2007 to 2018.
Unemployment,Rate in India expanded to 3.52 percent in 2017 from 3.51 percent
in 2016. In India found the,middle value of,4.05 percent from,1983 until,2017,
achieving an,untouched high,of 8.30,percent in 1983 and a record low of, ,3. 41
percent in 2014.


2.2 Employment rate in Spain
Employment,Rate in Spain expanded to,64.01 percent,in the second,from last quarter
of, 2019,from,63.53 percent in the second,quarter of 2019. The rate in Spain arrived at
the,midpoint of,61.06 percent from 2002,until 2018, achieving,an unsurpassed,high of
67.18 percent in the second,from last quarter of 2007 and a record low of,54.91 percent
in,the,principal,quarter,of,2013.

The,unemployment rate in Spain declined to 14.55 in the,second from last quarter of 2018
from 15.28 percent in the past period and beneath,market desires for 14.9 percent. It was the
most reduced,jobless,rate since the last quarter of,2008. Among areas, ,the most,astounding
rates were,recorded in Ceuta (30.8,percent), Melilla, (24 percent) ,Andalucía (22.9 percent)
and,Extremadura (21.7 per cent) Cantabria (9 percent) and País Vasco (9.4 per cent). In
Catalonia, ,jobless,percentage,was 10.6,and in,Madrid 11.9. Joblessness Rate in Spain found
the,middle,value of 16.54 percent from 1976 until 2018, achieving an unsurpassed high of
26.94 percent in the primary,quarter of 2013 and a record low of 4.41 percent in,the second
from last quarter,of 1976.

3. INTERNATIONAL TRADE
Foreign trade between India and Spain in the previous year was US$ 5.66 billion. Export
made by India to Spain was US$ 3.99 billion and import made by India from Spain was
US$1.67 billion. Thus trade balance ibetween India and Spain was US$2.32 billion. Among
all the countries in the European Union, Spain is the 7th biggest trading ally of India. The
main products that India exports to Spain are iron, steel, garments, organic chemicals and
textile. It also include automobile equipment, marine items and goods made of leather. On the
other hand India mainly imports vehicles, machinery, plastics, rubber, olive and electrical
appliances.Among all the investor, Spain is the 15th largest investor with an investment of
US$ 2.76 billion in FDI from April 2000 to June 2018. Spain has mainly invested in
infrastructure such as Isolux Corsan, Grupo San Jose, as well as invested in renewable energy
such as Gamesa and Acciona. Apart from this Spain has invested in auto segment such as
Gestamp and Antolin and also invested in desalination such as Abengoa and Inditex. There
are around 200 Spanish companies who have invested in India. On the other hand 40 Indian
companies has invested in Spain among which TCS, Tech Mahindra, Wipro, Infosys,
Mahindra, Sun Pharma, Ranbaxy, Avantha and Suzlon are the most important ones. The
Indian investment in Spain is around US$ 900 million euros.

3.1 Spanish Companies in India

In the past few years there has been a huge increase in the No. of Spanish companies in India
from 60 companies in,2007 to around 200 companies in 2019. Due to this industries such as
consumer goods industry, tourism industry, ,construction industry and retail industry in India
is significantlyi expanding, among which infrastructure and energy being the prominent ones.
Investment made by Spain in India is diverse in nature, which include,small, medium and large
scale enterprise. Due to huge size and population, the Spanish companies has shifted,their focus
towards India. Spanish,companies also see India as a perfect location to enter in Asian market.
The market in India is expanding with middle-class buyer which is one of the reason for it’s
attractiveness. Despite of all the value addition over all these years, Spain is unable to develop
it’s brand among the Indian consumer. Spain,is the largest,infrastructure development operator
in India with 80% among all th European countries. Metro railway in New Delhi is also
constructed with the help of advanced technology provided by the Spanish companies. Spanish
companies are also looking after the projects related to renewable energy. Mango,and Zara are
one of the famous Spanish brands but very few Indians knows that, irrespective of their
reputations,. In 2010 Zara,opened its first store in India and only 5 years later in 2015, it became
the first apparel brand to cross over US$100 million sales in India. Inditex has gone into a joint
venture with Tata Groups to control all kinds of operations. Roca, a Spanish,sanitary ware
manufacturer is one of the successful joint venture model. Roca purchased 50% stake of
Parryware,Glamourooms for €50 million, as a result Roca became the largest sanitary ware
company in the entire world. Roca Parryware has invested around 111 USD and due to it’s
experience in “state-of-the-art technology” i.e. direct access to the local market, it has constant
increase in it’s market share in India. It also acquire 120,million lavatories with the help of
Modi Government’s “Swachh,Bharat”.
This is a perfect example of efficient joint venture model, which can also be found in medium
scale companies. In 2016, Tubacex, a Spanish company which purchased 68% shares of
Prakash Steelage with an option of purchasing the remaining 32% stake. This division has a
budget of €25 million p.a. This acquisition enabled Tubacex,to bolster its position,in the
subcontinental,market, making it,one of the best,manufacturer of this product line in the world.

3.2 Indian companies in Spain

The private and corporate sector of India is gaining a vital importance in the international
market. In 1991, after the economic reforms, the Indian companies has become globalized.
This trend has directly reflected in India’s invested in the foreign markets. There are lot of
Indian companies who,have invested in the United States market and United,Kingdom’s
market. Similarly there are many companies which have gone into Spanish market, specially
in the IT industry, pharmaceutical industry, automobile industry as well as in energy. Apart
from these, textile,sector, ,tourism sector, infrastructure,sector and agricultural sector is
considered as the important ones where Indian and Spanish companies can get into joint-
venture in future. 40 Indian companies has invested in Spain through 100,subsidiary
companies, among which TCS, ,Tech Mahindra, Wipro, ,Infosys, Mahindra, Sun Pharma,
Ranbaxy, Avantha and Suzlon are the most important ones. All these companies are
responsible for almost 10,000 jobs and indirect employment. The Indian investment in Spain
is around US$ 900 million euros. In Spain the,presence of Indian company has significantly
increase by purchase of subsidiary company present in Spain. A classic example of this is take-
over of Jaguar and Land Rover along with the Spanish subsidiaries by Tata. Formation of
Arcelor Mittal, when merger of Arcelor and Mittal,Steel took place. Now Arcelor,Mittal has a
significant presence in Spain. Along with this, Indian companies like Suzlon and Ranbaxy
started doing direct,investment in Spain in,renewable energy sector and pharmaceutical sector
respectively with the help of high technological and value addition proposals.

3.3 Infrastructure
India needs huge amount of investment especially in the field of infrastructure to fill the
economics gaps. It is estimated that in the next 10 years, India requires investment of around
US$1.3 trillion especially in the transport sector, logistics sector and energy sector. India and
Spain support each other in developing their infrastructure as Spain has many famous and
renowned infrastructure developing,countries,which can,help India in,developing their
infrastructure.
In 2007, ,one of the best infrastructure company of Spain, FCC was given the offer by Delhi
Metro Rail Corporation to construct the metro railway system in Delhi. In the most recent
times, Isolux Corsan was given the offer and contract to expand and better roads of 88km in
Odisha. Isolux Corsan was also given couple of contract to construct a four-way lane of
roadway of 700km,and to improve,and construct advanced facilities inside the Delhi Metro. It
will also get into a joint venture with,Sadbhav Engineering Ltd India for constructing 2 over-
bridge and 7 elevated stations. The joint venture will also include designing ond constructing
bus-stops and parks in urban area for Delhi Metro Rail Corporation. Isolux Corsan has also
won two new contracts in Madhya Pradesh. It will add electric power transmission lines of
over 1600km which the,company has already started constructing and is operating in Uttar
Pradesh. Thus we can see that in a very short,period of time, many Spanish company has been
awarded many important and big contracts in various parts of India.
Indra is another Spanish infrastructure,developing company which is operating in India since
2007. It has implemented,many technological project in India among which air-traffic solution
is the most important one. It coordinate,and regulate 80% air-space of India. Apart from this,
another Spanish company, Sanjose,is responsible for the construction of highway in Uttar
Pradesh and Rajasthan. It is also responsible for construction of all subways in Mumbai.
All these joint venture between Spanish companies and Indian companies and tie-ups with the
Indian Government shows that in a very short span, most,of the Spanish infrastructure
companies are able to enter,the Indian market because of their experience and capacity levels.

 4. PUBLIC FINANCE



Public finance is a study of role of the governmentiin an economy. It is a part of economics
which focuses onigovernment revenue and government expenditure of publiciauthority
and to
adjust desirableieffects and avoid undesirable ones.
Government perform certain functions in a country such as to supply certain public or
combined goods which individualsicannot singly perform. And this responsibility of the
government to produce those merchandise that it desires revenue.
In a narrow sense, Public finance is defined only as the study of incomeiand expenditure of
the
government. But in theilarge view is that public finance does not deals only with the income
and expenditure of the government, it also deals with the sources of income and different
way
of governmentiexpenditure, corporations, and public companies.
Public finance includes the following constituents:
1. Public Expenditure: Publiciexpenditure is expend made by the government for
country on common needs andiwants such as pension, iprovision, infrastructure, etc.
expenditure spend on goods and services such as infrastructures like road, electricity,
telecom, and human capital collection like health and education; interest expenditure
etc.
2. Public Revenue: Revenueiwhich comes from different sources with major focus on tax
revenue.
3. Public Debt: when there is shortage of public revenue of expenditure then government
has to borrow from internal and external sources.


4.1 Public finance of Spain government
2017(MILLION 2018 (MILLION
EUROS) EUROS)
REVENUE AND GRANTS 196151 212948

Direct taxes 161035 173832

Indirect taxes 66893 75001

Social contributions 94052 98831

Current transfers within General Government 10085 12425

Other revenues 14679 16669

EXPENDITURES 218187 229324

Compensation of employees 23200 23937

Intermediate consumption 8609 8832

Social transfers 18217 19053

Interests 26461 26422

 Current transfers within General Government 110551 113400

Investment grants and other capital transfers 8082 10314

Other expenditures 7085 7899

EU own resources: VAT and GNR 3703 6768

Fixed gross capital formation 12279 12669

Net lendingi (+) / Net borrowingi (-) -22036 -16376

Spain's government deficit amounted to 2.5% of GDP in 2018, down from 3.1% of GDP in 2017.
The Commission's spring 2018 economic forecast projects deficits of 2.3% of GDP in 2019 and 2.0%
of GDP in 2020, thus remaining below the EU's 3% of GDP reference value over the forecast
horizon.

The ratio of gross government debt to GDP decreased to 97.1% in 2018 from 98.1% in
2017, mainly due to debt-reducing impact of real growth and inflation, while the primary
balance is close to zero. The Commission's spring 2019 forecast projects the debt ratio to
decrease to 96.3% in 2019 and 95.7% in 2020.
4.2 PUBLIC FINANCE OF INDIAN GOVERNMENT
2017 2018
Revenue Receipts 1435233 1725738
Tax Revenue 1242488 1480649
(Net to Centre)
Non Tax Revenue 192745 245089

Capital Receipts ¹ 706740 716475

Recovery of Loans 15633 12199

Other Receipts 100045 80000

Borrowings and Other 591062 624276

Liabilities²
TOTAL RECEIPTS 2141973 2442213

TOTAL EXPENDITURE 2141973 2442213

On Revenue Account of 1878833 2141772
which
Interest Payments 528952 575795
Grants in Aid for creation of 191034 195345
capital assets
 On Capital Account 263140 300441

Revenue Deficit 443600 416034

Effective Revenue Deficit 252566 220689

Fiscal Deficit 591062 624276

Primary Deficit 62110 48481

 5. GDP
5.1 GDP OF SPAIN :
GDP in Spain calculated based on production of final goods and services over a given period. The
percentage change in GDP rate is explain the GDP growth rate and is a measure of economy growth.
Spain’s GDP represents to 2.13% of the world economy.
The Gross Domestic Product (GDP) of Spain till 3rd quarter 0f 2019 is 979,866 Million US Dollar and
annual growth of Gross Domestic Product (GDP) is 2.0% at the end of 3rd quarter of 2019. The year-on-
year change in Gross Domestic Product (GDP) was 2%, three- tenths of one percent less than the 2.3%
in the 2nd quarter of 2019.

Year Annual GDP (In Million $) GDP Growth (In %)

2019 979866 (till Q3) 2.0

2018 1427533 2.4

2017 1317104 2.9

2016 1237998 3.0

2015 1199688 3.8

2014 1379100 1.4

2013 1362261 -1.4

2012 1336789 -3.0

2011 1489755 -0.8

2010 1434184 0.2

2009 1503409 -3.8

2008 1641514 0.9

2007 1481397 3.6

2006 1265678 4.1

2005 1158348 3.7

 GDP Growth (In %)
GDP Growth (In %)

5
4 3.8 4.1
3.6 3.7
3 2.9 3
2.4
GDP GROWTH IN %

2 2
1.4
1 0.9
0 0.2
-1 -0.8 2010 2009 2008 2007 2006 2005
2019 2018 2017 2016 2015 2014 2013 2012 2011
-1.4
-2
-3 -3
-4 -3.8
-5
YEAR

Annual GDP of Spain

1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006

2019 979866 (till Q3)

5.2 GDP OF INDIAi
The standard way to calculate Gross Domestic Product (GDP) of India is Net National Product (NNP),
the total market value of all final products produced in a financial year. India’s GDP represents to 4.19%
of the world economy.
The Gross Domestic Product (GDP) in India till 2nd quarter of 2019 is 1,109,170 Million US Dollar, and
annual growth of GDP is 5.1% at the end of 2nd quarter of 2019. The year-on-year change in Gross
Domestic Product (GDP) was 5.1%, seventh- tenths of one percent less than the 5.8% in the 1st quarter
of 2019. As per data till now the Gross Domestic Product in quarter 1st of 2019 is 540,681 Million US
Dollar and in 2nd quarter of 2019 the GDP is 568,489 Million US Doller so, quarterly increase in the
Gross Domestic Product (GDP) of India is 1.0% in compared to the previous quarter.

Year Annual GDP (In Million $) GDP Growth (In %)

2019
1,109,170 (till Q2) 5.1%
2018
2,718,732 6.80
2017
2,652,245 6.70
2016
2,289,754 7.10
2015
2,103,588 8.20
2014
2,039,127 7.40
2013
1,856,721 6.40
2012
1,827,637 5.50
2011
1,823,052 6.60
2010
1,708,460 10.30
2009
1,365,373 8.50
2008
1,224,096 3.90
2007
1,238,700 9.80
2006
949,118 9.30

2005 834,218 9.30




INDIA Annual GDP (In Million $)
30,00,000


25,00,000


20,00,000


15,00,000

10,00,000

5,00,000

0
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

GDP rate of india

12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2004 2006 2008 2010 2012 2014 2016 2018 2020

5.3 Comparisan between INDIAi and SPAIN
Analysing the GDP of India and Spain, what we found that the GDP of India is increasing yearly but
the GDP of Spain is fluctuating (ups and down). If we go through the table Spain’s Annual GDP is on
pic level in 2009 is 1,503,409 Million US Dollar that is higherithan the current GDP of Spain in 2019.
But if we go through the available data the Per Capita GDP of Spain is 36,300 US Dollar is much
higher than the Per Capita GDP of India is 7,200 US Dollar is because of, India is a free state country,
it means there is no close economical relation between the other state but if we talk about Spain,
Spain is economically strongly connected to the other members of the Union because of the
member of the European Union member. Another reason is the globalization, globalization impact
the growth of Indian Economy and slower growth of Spanish Economy. If we talk about the
manufacturing farms so all theimanufacturing powers are sifting towards the East; to India, China
and other developing countries from the well develop countries. The developed countries
producing powers are significantly decreased for the recent years as all the manufacturing powers
were replaced into the developing countries, which provided a huge developmental potential
for such countries as India. As indicated by most of the analysts, the tendency to GDP growth
in India and the other developing countries would remain in progressiveistage for the recent years.
Whereas, the growth of European GDP rate of Spain and other countries of the Union would be
significantly less than that of India.


ANNUAL GDP OF INDIA AND SPAIN

INDIA Annual GDP (In Million $) SPAIN Annual GDP (In Million $)

30,00,000

25,00,000

20,00,000

15,00,000

10,00,000

5,00,000

0
2004 2006 2008 2010 2012 2014 2016 2018 2020