Transcript The Republic of India

The Republic of India
Presented by: Team 3
James Draper
Brandon Patch
Marcus Robinson
Shawn Stanford
Debesh Shrestha
India
 Background
 Economic Situation
 International Aspects
 Special Problems
 The Future
Demographics
• Located in South East Asia
• Shares boarder with:
– Afghanistan and Pakistan (West)
– China, Nepal, and Bhutan (North East) and
– Bangladesh and Myanmar (East)
Demographics
• 7th largest country of the world
- Area covered (3.3 million sq. km)
• 2nd highest population of the world
- Population (1.1 billion)
• Density (329 per sq. km)
History
• First civilization – Indus River Valley
(3300 BC)
• India = ‘Indus’
• Successor – Vedic civilization
History
• Small kingdoms – ‘Mahajanapadas’
• Unification – Emperor Ashoka the Great
• Formed base of the Indian Culture and
heritage
History
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British as traders
East India Company
British took over India
Rebellion
Mahatma Gandhi
“Be the change you want
see in the world.”
Politics
• Largest among democratic countries
• Three branches of governance:
- Legislature
- Executive
- Judiciary
• President head of state
• Prime Minister head of government
Culture
• Rich cultural heritage
• Influenced by Islam – Taj Mahal
• Music – Carnatic and Hindustani
• Cuisine – Spicy and sweets
(Bombay House)
More Information
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Capital – New Delhi
Currency – Indian Rupees
Official Language – Hindi
Main Religion – Hinduism
Nation animal – Lion
India
 Background
 Economic Situation
 International Aspects
 Special Problems
 The Future
India Is Tiger In Cage
Before the last decade India was probably on the short list
of the countries with the worst economic systems of almost
every economist outside of India.
1947 History
• Its annual per capita income was only $50
for its 350 million people
– Life expectancy was only 32 years of age
– Literacy rate was 17%
India’s growth from 1960 to 1992
could have been much more substantial given India’s
human, institutional, and natural capital at hand.
Jagdish Bhagwati and other economists attribute this
failure to “nearly three decades of illiberal and autarkic
policies.”
Indian Growth Miracle
One cannot help but wonder
what sparked this amazing
growth in India’s economy over
the last 15 years. According to
Atanu Dey, “Some observers
have called the change from
an inward-looking autarkic
economy to an open, marketdriven economy as the Indian
Growth Miracle. The neoliberal economic reforms
propelled India to become one
of the fastest-growing
economies in the world.”
India’s Quasi-Socialist
Economic System
• Strict government control over
– Private sector participation
– Foreign trade
– Foreign direct investment
The average size of tariff for India is 22%, more than
double the average in Asia's developing countries.
India’s GDP growth rate is 8.9%
making India the second fastest growing
major economy in the world.
India
 Background
 Economic Situation
 International Aspects
 Special Problems
 The Future
Exports
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Gems and Jewelry
Ready-made Garments
Leather
Leather Products
Agricultural Products
Engineering Products
Minerals
Imports
• Machinery
• Transportation Equipment
• Mineral Fuels
Trade Partners
• United States
• Former Soviet Union
• European Community
• Japan
Trade Improvements
• Simplified Tariff
• Less Import Restrictions
- Eliminated Quantitative Restrictions
-Removal of all import restrictions maintained
for balance-of-payments reasons
• Reduced Export Restrictions
BBC News
Oct. 27, 2006
India says it has agreed to meet US trade
officials next month in a bid to hammer out
differences in achieving a global trade
agreement
• “Indian trade minister Kamal Nath said he
wanted the stalled Doha negotiations to resume
as soon as possible.”
• Nath said, ‘India could not open its markets to
subsidized agricultural products from the US.’
Investment
“Despite further liberalization of the FDI
regime, India’s record in attracting
investment remains disappointing, with
FDI accounting for some 1% of GDP. The
government has also taken various steps
to improve enforcement of intellectual
property rights which should help to attract
FDI.”
- India: June 2002, WTO.org
India
 Background
 Economic Situation
 International Aspects
 Special Problems
 The Future
Special Problems
1. Poverty
2. Corruption
POVERTY
The major causes for poverty have been:
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high population growth rate
high illiteracy (about 35% of population)
unemployment and under-employment
protectionist policies pursued till 1991 that
prevented high foreign investment
NSSO Poverty Rate
Year
Poverty Rate
1977-78
51.3
1983
45.65
1987-88
39.09
1993-94
37.27
2000
26.09
2004-05
22.15
Outlook for Poverty Alleviation
• The Eradication of poverty in India can
only be a long-term goal. But, good
progress is being made.
CORRUPTION
• “The chief economic consequences of corruption in India
are the loss to the exchequer (revenue collector), an
unhealthy climate for investment and an increase in the
cost of government-subsidized services.”
• Forms of Corruption
– Bribes
– Extortion
– Embezzlement
– Kickbacks
Areas of corruption in Indian States
• Study done by Transparency
International
• Darker regions more corrupt,
meaning less transparency in
government actions.
CORRUPTION
• The RIGHT TO INFORMATION ACT
(2005)
– “any citizen of India may request a department of
the Central Government, State Government or
Public Sector company or bank for information on
almost any question related to the department or
company's functioning.”
Other Important Economic Factors
• Unemployment
• Uneven distribution of wealth
India
 Background
 Economic Situation
 International Aspects
 Special Problems
 The Future
India’s Promising Future
• Infrastructure
• Growth
• Services
• Education
Infrastructure Development
• $15 Billion Development
• Shops in Bangalore, Mumbai, and
Delphi
• An Unusual Proposal
• Infrastructure Vs. Internal Earnings
• Water Dependent
Growth
• Smart Growth
• Advantages:
Promote Inner-city Development
Preserve Natural Resources
Reduce Sprawl
Save Taxpayers Money
Integrate Needs
Growth
• Further Initiatives still needed
– Water Systems, Ports, Civil Aviation,
Telecom, Roads
• Foreign Investment
Triggers Technology
Efficiency of Resources
Enterprise Development
Contribution to Trade
Service Sector
• More than ½ of GDP
• Fundamentals of a Developed Country
• CAUTION! Could Distort Growth
• But, FDI has risen from $671.4 M to $2 B
Service Sector
• Liberal Industry Policy
– Will Keep Industry and Services Balanced
– Evidence of Increasing Growth
Already showing results: Auto Industry
16.49 Percent Growth within last year
Education
• Challenge: Acquiring Global Workplace
Skills
• Population: ½ Billion under age of 25
• Goal: Turn Youth into an Asset
• Encourage the Brightest from Taking
Their Expertise Elsewhere
• Youth to Yield many Long-term Dividends
Vision
• An “Inclusive, Prosperous, Democratic,
and Equitable India.”
– Manmohan Singh
(India’s Prime Minister)
Questions ?