Contribution of different sector in indian economy. Role of agriculture in indian economy.

1. TOPIC OF SEMINARIndian Economy & Agriculture RAJESH KUMAR MBA-Agribusiness management CABM, GBPUA&T, Pantnagar. Is India really shining? Or is it mere propaganda? 3/8/2011 1

2. CONTENT Some key terms. Statistical fact,Q-3,year 2009-10. Key indicators. Some Encouraging statistics. Economic planning in India. 11th (2007-12)five year plan. India at a glance. 3 major sectors of Indian economy. Important charts ex. GDP,Exports,Imports,FDI. Agriculture, major problems, solutions. Conclusion. 3/8/2011 2

3. SOME KEY TERMS 3/8/2011 3

4. INDIAN ECONOMY 3/8/2011 4

5. INDIA-SELECTED HEALTH /KEY INDICATORS 3/8/2011 5

6. Some Encouraging Statistics.. India is the second fastest growing major economy. India is already the fourth largest economy in the world at PPP. 2010, India's foreign exchange reserves totaled US$ 277.04 billion, an increase of US$ 24.71 billion over the As on March 26, same period last year, according to the Reserve Bank of India's Weekly Statistical Supplement. India received FDI worth US$ 20.92 billion during April-December 2009, taking the cumulative amount of FDI inflows from August 1991 to December 2009 to US$ 127.46 billion, according to the Department of Industrial Policy and Promotion. The number of registered FIIs was 1713 as on March 31, 2010. Indian companies have gone on a buying rampage, with Tata Steel acquiring Corus, Mittal buying Arcelor and Tata also buy Jaguar and Land Rover from Ford. The Bombay Stock Exchange’s value has been consistently rising, currently worth 1.61 trillion dollars, the largest in South East Asia. Unemployment has dropped by 2% annually, and illiteracy and mortality rates have also been falling, indicating that India is not only growing but developing too. India’s poverty level is decreasing by 10% annually Every year India’s middle class is increased by 40,000,000 new members which shows that the wealth is truly entering society. The number of billionaires in the country were 3 in 1999; 23 in 2006; and are 48 currently. 3/8/2011 6

7. India ranks 49 among 133 countries in 2009-10 in the global competitiveness index (GCI) prepared by the World Economic Forum (WEF), an improvement of one position from last year.(performance is measured on 12 categories of GCI,some of them are as follows:- Exports from India were worth US$ 16.09 billion in February 2010, 34.8 per cent higher than the level in February 2009, according to the Ministry of Commerce and Industry. India's imports during February 2010 were valued at US$ 25.05 billion representing a growth of 66.4 per cent over February 2009. Foreign tourist arrivals in India during the month of February 2010 were 601,000, an increase of 9.9 per cent over February 2009. Foreign exchange earnings during February 2010 were US$ 1.43 billion, an increase of 55.4 per cent over February 2009, according to data released by the Ministry of Tourism. The total telephone subscriber base in the country crossed the 600-million mark to touch 600.69 million in February 2010, taking the overall tele-density to 51.05, according to the figures released by the Telecom Regulatory Authority of India (TRAI). Also the wireless subscriber base increased to 563.73 million. According to data released by Society of Indian Automobile Manufacturers, the cumulative production data for April-February 2010 shows production growth of 24.34 per cent over same period last year. Passenger vehicles production crossed 2 million and two wheelers production touched almost 9.5 million. 3/8/2011 7

8. According to the Gem and Jewellery Export Promotion Council, the exports of gems and jewellery from India including rough diamonds, rose by 10.48 per cent during April-February 2010 to touch US$ 28.84 billion. The Indian drug retail market grew by a 29.24 per cent in value terms in October 2009 over the year ago period, more than double the average monthly revenue growth rate of 13-14 per cent in the recent past, as per market research firm ORG IMS. India has joined an elite group of six countries which have successfully decoded the human genome indigenously. The discovery, which was announced by the Council of Scientific and Industrial Research (CSIR), will bring pharmaceutical companies a step closer to designing drugs accounting for the specific characteristics of the Indian physiology. Merger and acquisition (M&A) activity involving Indian small and medium enterprises (SMEs) are on the rise. During the first two months of 2010 M&A transactions worth US$ 155 million have been concluded in the SME sector, up by 66 per cent over the US$ 93 million in transactions in the corresponding period of 2009, according to Venture Intelligence, a Chennai-based research firm focusing on M&A and PE transactions 3/8/2011 8

9. ECONOMIC PLANNING IN INDIA National planning commission was established in march 1950. Main objective:-formulate a plan for the most effective & balanced utilization of the country’s resources. 1st five year planning-(1951-56) 2nd five year planning-(1956-61) (earlier main focus was given on roti, kapda aur makan) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (now it is shifted to bijli,sadak aur pani) 10th five year planning-(2002-07) 11th five year planning-(2007-12) 3/8/2011 9

10. 11th five year planning-(2007-12) MAIN POINTS:- To accelerate GDP growth from 8% to 9%. To reduce educated unemployment to below 5%. To reduce IMR to 28 & maternal mortality rate to 1 per 1000 live birth. A 2nd green revolution is urgently needed to raise the growth of agricultural GDP to around 4%. Reduction of poverty, aim to less than 10% by 2011-12. Aim to provide essential services like education,health,clean drinking water, electricity. GROWTH TARGET:-agriculture-4% per annum. industry-10-11%per annum. services-9-11%per annum. 3/8/2011 10

11. 11th five year planning-(2007-12)TOTAL OUTLAY=36,44,718 crore(at 2006-07)/approx 36 trillion.CENTRAL PLAN OUTLAY=21,56,571 crore(at 2006-07)/approx 21 trillion.OUTLAY OF STATES AND UNION TERRITORIES=14,21,711crore(at 2006-07)/approx 14 trillion. 3/8/2011 11

12. India at a Glance GDP Composition by Sector: Services: 62.6 per cent Industry: 20 per cent Agriculture: 17.5 per cent (2009 est.) Forex Reserves: US$ 285.1 billion (in the week ended January 15, 2010) 3/8/2011 12

13. Cumulative Value of Exports: US$ 104,247 million (April- November, 2009) Exports Commodities: mineral fuels, petroleum products, gems and jewellery, iron and steel, organic chemicals, nuclear reactors, heavy machinery. Export Partners: US 12 per cent, UAE 10.8 per cent, China 5.1 per cent, Singapore 4.8 per cent, Hong Kong 3.7 per cent, UK 3.6 per cent (April’08-February’09) Cumulative FDI Inflows: US$ 19.38 billion (April-November 2009) Top Investing Countries: Mauritius, USA, Singapore, Cyprus, Japan (during April 2009 to October 2009) Major Sectors Attracting Highest FDI Equity Inflows: Services Sector, Telecommunications, Housing and Real Estate, Agriculture Services, and Power (during April 2009 to October 2009) 3/8/2011 13

14. The Three Major Sectors All values in Rs millions 3/8/2011 14

15. Sub Sectors Of Primary Sector All values in Rs millions 3/8/2011 15

16. Sub Sectors Of Secondary Sector All values in Rs millions 3/8/2011 16

17. Sub Sectors Of Tertiary Sector All values in Rs millions 3/8/2011 17

19. GDP growth rate – 7.2%

20. Services contribution – 60-65%

22. GDP growth rate – 9.5%

23. Services contribution – 60%

25. GDP growth rate – 9%

26. Services contribution – 54%

27. Balance of Trade – USD (-)46.2 billionGrowing Indian Economy *: ProjectedSource: Economic Times & India Brand Equity Foundation (IBEF) 3/8/2011 18

28. Growing GDP Contribution of Services - increased from 48% to 62.6% in 2009-10 (as on January 2010) *: ProjectedSource: India Brand Equity Foundation (IBEF) 3/8/2011 19

29. Growing Exports *: Projected .Cumulative Value of Exports: US$ 104,247 million (April- November, 2009) Exports projected at $188.9 billion in 2009/10(eco outlook for 2009-10 Source: Ministry of Commerce & IBEF 3/8/2011 20

30. Source: Ministry of Commerce & IBEF Imports projected at $306 billion in 2009/10 Growing Imports 3/8/2011 21

31. Increasing Forex Reserves Forex Reserves: US$ 285.1 billion (in the week ended January 15, 2010) Steadily increasing Forex reserves offer adequate security against any possible currency crisis or monetary instability Source: Reserve Bank of India & India Brand Equity Foundation (IBEF)

33. FDI inflows from August 1991 to December 2009 to US$ 127.46 billion, according to the Department of Industrial Policy and Promotion.

34. Source: Department of Commerce3/8/2011 23

35. Increasing Per Capita Income Per Capita Income (constant prices) in 2008-09: US$ 653.13 Source: India Brand Equity Foundation (IBEF) & Economic Survey 2007-08 3/8/2011 24

36. India Inc. Investing Overseas Main sectors: Main Destinations: China, UAE, UKNorth America is emerging as a destination.

37. Exports to US India’s Trade with USA USD Billion Imports from US Source: Department of Commerce, Govt of India

38. Export Partners: US 12 per cent, UAE 10.8 per cent, China 5.1 per cent, Singapore 4.8 per cent, Hong Kong 3.7 per cent, UK 3.6 per cent (April’08-February’09) Major Items Exported to USA Source: US Department of Commerce

39. Major Items Imported from USA Source: US Department of Commerce 3/8/2011 28

40. SHARE IN GDP 3/8/2011 29

42. 60% of population still depends on agriculture for their livelihood.

43. Occupied 43% of India’s geographical areas.

44. According to the Centre for Monitoring Indian Economy (CMIE), crop production is expected to rise by 1.7 per cent during FY 10 and food grain production is expected to increase by 1.1 per cent.

45. All other sectors are growing at much faster.India has become the world's largest producer across a range of commodities due to its favourable agro-climatic conditions and rich natural resource base. India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables. 3/8/2011 30

46. Agriculture(continued…) According to the government's agri-trade promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA), India's exports of agricultural and floricultural products, fruits and vegetables, animal products and processed food products was worth US$ 7.98 billion in 2008-09, an increase of 13.88 per cent from US$ 7.01 billion in 2007-08. India's agri-export turnover is expected to double in the next five years, according to APEDA. Agri-export turnover is set to rise to nearly US$ 18 billion by 2014. At present, around 70 per cent of the country's agricultural and processed food exports are to developing countries in the Middle East, Asia, Africa and South America. The National Cooperative Development Corporation (NCDC), a statutory corporation under the Union Ministry of Agriculture, is to take up various cooperative development programmes in the country. 3/8/2011 31

47. In Budget 2010-11, the Finance Minister, Mr. Pranab Mukherjee has made the following announcements for the agriculture sector. US$ 88.02 million is provided to increase the Green Revolution to the eastern region of the country comprising Bihar, Chattisgarh, Jharkhand, Eastern up, West Bengal and Orissa. US$ 66.02 million has been provided to organize 60,000 pulses and oil-seed villages in rain-fed areas in 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health to improve productivity of the dry land farming areas. Banks have been consistently meeting the targets set for agricultural credit flow in the past few years. For the year 2010-11, the target has been set at US$ 82.53 billion. In addition to the 10 mega food park projects already being set up, the government has decided to set up five more. External commercial borrowings are available for cold storage for preservation or storage of agricultural and allied products. 3/8/2011 32

48. GOVERNMENT INITIATIVE India is expected to spend around US$ 14.05 million for the development of organic spices, particularly turmeric, chilly, and ginger, by 2012. The government has already approved 60 Agricultural Export Zones (AEZs) The National Food Security Mission was launched in 2007, with an outlay of US$ 979.51 million over the 11th Plan (2007–2012). It aims at enhancing the production of rice, wheat and pulses by 10 million tonnes, 8 million tonnes and 2 million tonnes respectively, by the end of the 11th Plan Services related to agro and allied sectors have been thrown open to 100 per cent foreign direct investment (FDI) through the automatic route The Cabinet has approved 2 per cent interest subsidy on bank loans taken by farmers. The subsidy would cost the exchequer about US$ 826 million in the fiscal year 2009-10 3/8/2011 33

49. Indian agriculture still suffers from Monson based agriculture(60% ag.depend on rain). Poor productivity(small landholding, soil qly)). Falling water levels. Expensive credit. A distorted market. Many intermediaries who increase cost but do not add much value. Laws that stifle private investment. prices fluctuations. Poor infrastructure(loss of Rs500 billion /yr). Produce that does not meet international standards. Inappropriate research. 3/8/2011 34

50. NOW THE QUESTION COMES,HOW IT CAN BE STRENGTHEN? Agricultural marketing(M. information, sorting-grading, transportation).cooperative,Apni mandi,Rythu bazar etc. Retailing. Wasteland development(ex.Indira Gandhi Canal). Risk management(watershed, linkage of rivers). Farm extension(agriclinic,IVLP,lab to land programme). Technological measures, Biological(seed, fertilizer) & Mechanical innovations(tractors, harvesters)etc. Contract farming. Finance. 3/8/2011 35

51. 36 CONCLUSION:-Major Areas of Reforms Needed Business environment: Lowering the barriers to entrepreneurship Ending reservation of products for SSI Need for Bankruptcy law, fault practice. Easing of Service sector FDI restrictions More privatization of public sector enterprises Financial sector: More liberalization Privatization of public sector banks Infrastructure : Electricity reforms to be speeded up transport: More private sector involvement Public Finances: Better targeting of subsidies, GST Education: Higher public expenditure on primary and education, Addressing financing of higher edu. ‘Modern’ agriculture: condition to produce surpluses in order to enhance economic growth. 3/8/2011

52. MY FINAL NOTE If these problems are solved then the future for India looks bright, India might well become one of the superpowers of the 21st Century. India- A country with Potentials for ‘sustaining’ development!! 3/8/2011 37

53. Thank You 3/8/2011 38