ECONOMIC GROWTH

AND DEVELOPEMNT

BY:
UZMA SHAHEDI
SHABEENA AFROZ
YASHASVINI PRIYA
SPRIHA BADOLA
RASHDA YASMIN
 DEFINING ECONOMIC GROWTH AND
ECONOMIC DEVELOPEMENT
Economic growth is defined as the increase in the value of goods and
services produced by every sector of the economy. It is the sustained
increase in the per capita income (GDP)

Economic development is defined as the development of economic

wealth of a country for the well-being of their inhabitants. In other
words, it refers to the progressive change in the socio-economic
structure of a country which involves a steady decline in agricultural
shares in GNP and increase in shares of industries, trade, banking,
construction and services.

Economic development is the increase in the standard of living in a

nation's population with sustained growth from a simple, low-
income economy to a modern, high-income economy
 DIFFERENCE BETWEEN ECONOMIC
GROWTH
ANDdevelopment
1} Economic ECONOMIC DEVELOPMENT
refers to the problems faced by the
underdeveloped countries and is thus a far more comprehensive and
multi-dimensional term than economic growth which applies to those
of developed countries
2} Economic growth takes into account quantitative changes in the
economy whereas economic development takes into account qualitative
changes in the economy.

3}Concept of economic development is wider than economic growth as it

involves the creation of more opportunities in the sectors of education,
healthcare, employment and the conservation of the environment.
4} Economic Development is a process of continuous improvement
whereas economic growth is primarily long term; The short-run
variation of economic growth is termed the business cycle.
 Un’s Indices to measure development

HDI (Human Development Index) measure the country’s average

achievement in three basic dimensions of human development :-
life expectancy, educational attainment and real income

HPI (Human Poverty Index) measures deprivation using % of people

expected to die before 40 years of age, % of literate adults, % of people
without access to health services and water and % of underweight
children under five.
about
LPG
•LIBERALIzATION:-refers tot a set of measures and reforms
aimed at the creation of an open economy

GLOBALIzATION:- the integration and internationalization of

markets and corporations

•PRIVATIzATION:- selling state owned enterprises to private

individuals or corporation
 Reason for implementing lpg in india

• Excess of consumption and expenditure over revnue resulting

in heavy government borrowing
• Growing inefficiency in the use of resources
• Over protection to industry
• Mismanagement of firm and economy
• Burden of national debt
 Example of globalization

• It is surprised to see the immense popularity which Indian

Premier League, the organization of the T20cricket matches,
by the Board of Cricket Control in India (BCCI), got during
last season. This year, IPL 2 has crossed the boundaries of
nation, and now it is all set to develop a new example of
globalization
 Example of liberalization

• shift in the pattern of exports from traditional items like

clothes, tea and spices to automobiles, steel, IT etc
 Examples of privatization in india

• Lagan jute machinery company

• Modern food industry limited

 agriculture
India ranks second worldwide in farm
output and the largest economic sector of
India. India's agriculture and allied sector
grew by 3.8 per cent in the first six
months of the current fiscal (2010-11)
Capital investment in agriculture has increased from US$ 1.2 billion
in 2007-08 to US$ 3.26 billion in 2010-11

India's exports of agricultural and floricultural products, fruits

and vegetables, animal products, cereals and processed food
products was worth US$ 1.14 billion during April-May 2010-11

India's agri-export turnover is expected to rise to nearly US$

18 billion by 2014.
 Banking and finance
 There was a credit growth of approximately 21 percent in
2010-11.
 In 2011-12, credit growth is expected to moderate to 18-19
percent.
 Net interest margins will come under pressure in 2011-12.

 Proposal by the government to enhance the housing loan limit

under the priority sector to 25 lakh.

 Such measures are expected to help banks achieve their

priority sector lending targets and offer lower lending rates to
borrowers.
 Energy and power
 India's oil reserves meet 25% of the country's domestic oil
demand. And is the fourth largest consumer of oil in the
world

 As of 2010, India imported about 70% of its crude oil

requirements.

 As of 2010, India had an installed power generation capacity of

164,835 megawatts

 India meets most of its domestic energy demand through its 106
billion tonnes of coal reserves.

 India's dwindling uranium reserves stagnated the growth of nuclear

energy in the country for many years.
 INFORMATION
TECHNOLOGY
 The Indian information technology (IT)
industry plays key role in putting India
on the global map and is now
envisioned to become a US$ 225 billion
industry by 2020.

Exports are expected to grow approximately 22% year-on-year to

$34 billion in 2010-11.

Indian IT-BPO sector - premier growth engine, in terms of revenue

growth, employment and value creation

India's personal computer market grew 30 per cent in 2010 — the

highest since 2007.
 automobile
 In 2010-11, the industry witnessed a strong growth.

 Cars and utility vehicles (UVs) grew 30% while commercials

vehicles (CVs),two- wheelers and tractors grew 26%.

 In 2011-12.cars and UVs are expected to grow 17%, CVs

18% and two-wheelers 14%.
 textile
 In 2010-2011, the country
benefitted from continuing 9%
year-on-year demand growth in
the domestic market and a
rebound in exports

 An unprecedented increase in
cotton prices is expected to lower
profitability of spinning companies
and garment manufacturers in
2011-2012, polyester
manufacturers, however, stand to
gain.
 Global trade relations
(PRE LIBERALISATION SCENARIO)

Until 1991, India intentionally isolated itself from rest of the world.

 Foreign trade was subject to import tariffs, export taxes and

quantitative restrictions.

FDI, restricted by upper-limit equity participation, restrictions on

technology transfer, export obligations and government approvals.

Capital flows consisted of mainly foreign aid, commercial borrowing

and deposits of NRIs.

Imports due to industrialization being nascent, consisted

predominantly of machinery, raw materials and consumer goods.
 The post liberalisation scenario
India's reliance on external
assistance and concessional debt has
decreased since liberalisation of the
economy.

GDP growth rate:- 1991-2.1%

2011- 8.4%

Major trading partners are the European Union, China, the United

States and the United Arab Emirates.

Major import commodities include crude oil and related products,

machinery, electronic goods, gold and silver.
Major export commodities include engineering goods,
petroleum products, chemicals and pharmaceuticals, gems,
jewellery, textiles and garments, agricultural products, iron ore
and other minerals.

 India's growing oil import bill ,the main driver behind the
large current account deficit.

 India is a founding-member of General Agreement on Tariffs

and Trade (GATT) since 1947 and its successor, the WTO.

 As the fourth-largest economy in the world in PPP terms,

India is a preferred destination for FDI, has strengths in
telecommunication, information technology, auto
components, chemicals, apparels, pharmaceuticals, and
jewellery.