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Transcript of International Finance
1991 2013 1991 to Date The Forecast After
1991 Manufacturing Industry
Post-Independence Four distinct phases since independence
Increase in share of manufacturing in GDP
Ascendancy of organised sector
Rise of intermediate products and capital goods Restrictions On Manufacturing Market share reserved for public sector.
Capacity restrictions and industrial licensing.
Investments were monitored by MRTP Act 1969.
High import tariffs on capital goods and technology.
Restrictions on foreign direct investment (FDI). The 1980's Break Industrial growth averaged 7.1 %
Manufacturing sector witnessed strongest growth
Significant relaxation of industrial controls
Failed to keep pace with growth in other countries Pre-Liberalization Period Today's manufacturers – efficient and prudent
India compared to china
Future of India is bright with changing mindsets
Initiatives that need to be taken to help manufactures reach the global market
India today after the British rule Service Sector Pre-Liberalization Period After
1991 1991 to Date The Forecast 2013 Before
1991 Post Independence India focused on industrial and agricultural sector.
Nationalization of banks in 1969 -3rd five year plan.
Increased rate of growth in 1980’s.
Balance of payment crisis – IMF asked for reforms.
Shift from agricultural to service sector. Global Analysis and
International Comparison Service sector preceded and supports manufacturing sector.
GDP grows above emerging developed countries.
Ranked 11th in services GDP .
Rapid increase in service GDP over the years.
China and India increasing world export of services Foreign Direct Investments Infrastructure
4% FDI projects and 9% jobs
FDI grows by 90%
10% FDI projects
Inflow increased by 31% Financial Services
75% FDI projects
21% growth in industry
Seen rapid growth all over the world
Exports have increased from 8% to 25% The Future of Service Sector in India The Future of Service Sector in India (Cont.) HSBC Market index jump
Large scale expansion plans •Privatization
•Future of services in the rural markets
•Future changes in the industry
•Employment in services
•Challenges faced by the sector Present Growth of service sector exports
Rise in share of employment
Contribution to FDI flows
Liberalization reforms Sectors Telecommunication sector Banking Sector Retail & Distribution Sector IT & ITeS Sector Hospitality &Tourism Sector Foreign Direct Investments First Phase – NTP, TRAI, FDI
Second Phase – Private operators
Outcome – Good & Bad Key liberalization measures
FDI introduced and raised gradually
Entry of private sector banks &
Outcome Nature and extent of liberalization varied across the different segments
Retail segment – single brand retailing
Non-retail segments far more liberalised
FDI Multi-brand retailing IT & ITeS sector - four major components
IT & ITeS sector Export
Challenges Significant growth in recent years
Growth of FTA and FEE
Domestic tourism Manufacturing Sector Present Key to Economic development.
Potential to elevate the economy.
Reforms of 1948, 1956 and 1991.
Sectors coped well worth changes. Current Scenario Contribution to GDP is 15.4%
Employed only 12% of workforce
National Manufacturing Policy
FDI added $72.9 Million Reforms, Trade & Growth Main Economic Reforms of 1991.
Manufactured Exports increased at 20%.
Engineering and Chemical Products.
50 Sectors grew by 39%.
National Manufacturing & Investments Zones. Investment Projects Investment of $58,261 Million in 2011
Attractiveness Profile of India has evolved
Targeting industrial machinery, equipment and tools & automotive sectors
Growth to be made Sustainable Advanced Technology
Highest Rates of Industrial Growth
Expansion in to services Singapore Korea Taiwan Administrative Measures
Human Capital Formation
Restricted FDI inflows China Well-sturctured Industrial Policy
Privatization and FDI
High Technology India Closed the inflow of foreign goods
Inefficiency & Technology Stagnation Credits
Ananya Pandeya 11