India has become the fastest growing economy in the world according to the Central Statistics Organization (CSO) and the International Monetary Fund (IMF). According to the Economic Survey 2015-16, the Indian economy will continue to grow more than 7% in 2016-17. The improvement in India's economic fundamentals has accelerated in 2015 with the combined impact of strong government reforms, the RBI inflation approach backed by benign global commodity prices. India's Consumer Confidence Index for the April-June 2016 quarter fell to 128 from the peak of 134 in the January-March 2016 quarter. India was ranked the highest worldwide in terms of confidence Of the consumer during the October-December 2015 quarter, continuing its previous trend of being ranked the highest during the first three quarters of 2015, according to the global consumer confidence index created by Nielsen.
India's economy is the sixth largest economy in the world, measured by nominal GDP and the third by purchasing power parity (PPP). The country is classified as a newly industrialized country, one of the main economies of the G-20, a member of the BRICS and a developing economy with an average growth rate of approximately 7% in the last two decades. Maharashtra is the richest Indian state and has a nominal annual GDP of $ 330 billion, almost equal to that of Portugal and Pakistan and accounts for 12 percent of Indian GDP followed by the states of Tamil Nadu ($ 150 billion). And Uttar Pradesh ($ 130 billion). India's economy became the world's fastest growing economy in the last quarter of 2014, surpassing the People's Republic of China. The combination of protectionism, import substitution, Fabian socialism and social-democratic policies ruled India for some time after the end of the British occupation. The economy was then characterized by extensive regulation, protectionism, public ownership of large monopolies, widespread corruption and slow growth. Since 1991, continued economic liberalization has led the country to a market-based economy. By 2008, India had established itself as one of the fastest growing economies in the world. Growth slowed significantly to 7.0% in 2008-09, but subsequently rebounded to 7.4% in 2009-10, while the fiscal deficit rose from 5.9% to a high 6.5% during the year. Same period. India's current account deficit increased to 4.1% of GDP in the second quarter of 2011 from 3.2% in the previous quarter. The unemployment rate for 2012-13, according to the Government of the Indian Labor Office, was 4.7% nationally, using the UPS method and 3% using the NSSO method. India's consumer price inflation ranged from 8.9% to 12% over the period 2009-2013.
According to the IMF World Economic Outlook Update (January 2016), India's economy is expected to grow to 7 to 7.75 percent during the 2016-17 fiscal year, despite uncertainties in the global market. The 2015-16 Economic Survey predicts that India's economy will grow more than seven percent for the third consecutive year 2016-17 and may begin to grow to eight percent or more over the next two years.
According to the Fitch Ratings Agency, India's Gross Domestic Product (GDP) is likely to grow by 7.7 percent in fiscal year 2016-17 and will slowly accelerate to 8 percent for fiscal year 2018-1919, driven by Gradual implementation of structural reforms, and improved economic activity.
According to Mr. Arun Singh, Indian Ambassador to the US, India's pharmaceutical market is expected to grow to the United States. $ 55 billion in 2020, thus emerging as the sixth largest pharmaceutical market globally by absolute size.
India's foreign exchange reserves stood at $ 360 billion by the end of March 2016, compared with $ 342 billion in the same period last year, according to data from the Reserve Bank of India.
According to a report by rating agency ICRA Limited, the Indian securitization market increased 45 percent year-on-year to Rs 2.5 billion (US $ 3.7 billion) in fiscal year 2016, mainly due to According to a Goldman Sachs report released in September 2015, India could grow at a potential 8 per cent on average from fiscal 2016 to 2020 by greater access to banking, technology adoption, urbanization and other structural reforms.
Purpose of India's economic planning
1. Economic development:
The main objective of Indian planning is to achieve the goal of economic development. Economic development is necessary for underdeveloped countries because they can solve the problems of general poverty, unemployment and backwardness through it.Economic development is concerned with increasing per capita income and the causes of this increase.To calculate the economic development of a country, we must take into account not only increase its total production capacity and consumption but also increase its population. Economic development refers to the rise of the population of inhuman elements such as poverty unemployment and ill health, etc.
2. Increase employment:
Another objective of the plans is a better utilization of human power resources and increased employment opportunities. Measures have been taken to provide employment for millions of people during the plans. It is estimated that at the end of the Tenth Plan (2007) will employ 39 people.
It has been the goal of the plans that the country becomes self-sufficient with respect to food grains and industrial raw material such as iron and steel, etc. In addition, growth must be self-sustaining for which savings and investment rates will be raised. With the completion of the Third Plan, India's economy has reached the stage of development take-off. The main objective of the Tenth Plan is to eliminate dependence on external aid through increased export trade and the development of domestic resources.
4. Economic Stability:
Stability is as important as growth. It implies absence of frequent excessive termination of inflation and deflation. If the price level rises very high or falls very low, many types of structural imbalances are created in the economy.Economic stability has been one of the objectives of each five-year plan in India. A certain increase in prices is unavoidable as a result of economic development, but should not be out of proportion. However, since the beginning of the second plan, prices have increased considerably.
5. Social Welfare and Social Services:
The objective of the five-year plans has been to promote labor well-being, the economic development of the backward classes and the social welfare of the poor. The development of social services such as education, health, technical education, scientific advancement, etc. Has also been the objective of the Plans.
6. Regional Development:
Different regions of India are not economically equally developed. Punjab, Haryana, Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, etc. Are relatively more developed. But U.P., Bihar, Orissa, Nagaland, Meghalaya and H.P. They are economically backward. The rapid economic development of backward regions is one of the priorities of the five-year plans for achieving regional equality.
7. Integral Development:
The whole development of the economy is another objective of the five-year plans. Development of all economic activities namely. Agriculture, industry, transport, power, etc. The First Plan emphasized the development of agriculture. The second plan gave priority to the development of heavy industries. In the eighth Plan the maximum effort was centered on the development of human resources.
8. Reduce economic inequalities:
Each Plan aims to reduce economic inequalities. Economic inequalities are indicative of exploitation and injustice in the country. This makes the rich richer and the poor poorer. A number of measures have been taken in the plans to achieve the objectives of economic equality, in particular through progressive taxation and the reservation of jobs for economically backward classes. The objective of the socialist model of society was established in the second plan mainly to achieve this goal.
9. Social justice:
Another objective of each plan has been to promote social justice. It is possible in two ways, one is to reduce the poverty of the poorest part of society and the other is to reduce inequalities of wealth and income. According to the Eighth Plan, a person is poor if he spends less than Rs on consumption. 328 per month in rural area and Rs. 454 per month in the urban area at prices from 1999-2000. About 26 percent of the indigenous population lives below the poverty line. The tenth plan aims to reduce it to 21%.The other objective of the plan is to raise the standard of living of people. The standard of living depends on many factors such as per ca-pita income growth, price stability, equitable income distribution, etc. During the period of the Plans, per ca-pita income at fair prices.
10. Increasing standard of living:
The other objective of the plan is to raise the standard of living of people. The standard of living depends on many factors such as per ca-pita income growth, price stability, equitable income distribution, etc. During the period of the Plans, per ca-pita income at current prices has reached only Rs. 20988.
The advantages that the investments of the foreign companies contribute to the Indian economy can be:
1. Government revenues will increase by billions of dollars that can be used for the development of the economy.
2. The savings of Indian consumers will increase as they will get food grade products at a cheaper price.
3. Employment opportunities will increase due to the development of various sectors.
4. Greater compensation for farmers can be expected to put an end to their calamities.
5. Infrastructure and technology transfers will increase. In addition, efficiency will improve because of competitions.
It also has disadvantages in other ways
1. The entry of large foreign companies will cause a severe displacement of small and unorganized enterprises
2. It would lead to monopoly in some sectors.
However, see more benefits with the entry of foreign companies in favor of the Indian economy.
The development of India's security markets began with the launch of the Bombay Stock Exchange (BSE), Mumbai in July 1875 and the Ahmadabad Stock Exchange in 1894 and another 22 in several cities over the years. In 2014, India's stock market became the tenth largest in the world by market capitalization, just above those of South Korea and Australia. The two major stock exchanges in India, BSE and the Indian National Stock Exchange had a market capitalization of US $ 1.71 trillion and US $ 1.68 trillion respectively from February 2015, according to the World Federation of Exchanges .
The IPO market in India has been small compared to NYSE and NASDAQ, raising $ 300 million in 2013 and $ 1.4 billion in 2012. Ernst & Young says that low IPO activity reflects Market conditions as well as slow government approval process and complex regulations. Before 2013, Indian companies were not allowed to list their securities internationally without completing an IPO in India. By 2013, these security laws were reformed and Indian companies can now choose where they want to list first - abroad, at home or at the same time. In addition, security laws have been revised to facilitate listing abroad of listed companies, to increase private equity liquidity and international investors in Indian companies.