DYPIMS

Indian Economics

Assignment No. 1

Submitted To: Prof. Sapna Suri

Submitted By: ANAND V. VED

MBA Core - DIV. 4 A

Roll No. – 15
Question: 1 Give the detailed summary of the article.

Ans. The article basically talks about the changes happened in India
since independence. It has also covered changes in economical,
strategic as well as cultural. The article explains that India is on the
move. The changes described are jolted it out of old certainties and
familiar patterns in its interaction with the world. India has seen its
influence in world affairs wane in part because its economic clout
has not been able to match the leading posture it assumed. India
now faces the challenges of repositioning itself in the world. The
Indian government is increasingly aware of the need for India to
become world competitive in order to win a leading place in the
global economy.

Since independence India has been characterized as having one of

the world’s most inward-looking economies. The barriers to entry in
some sector were reduced, the unprofitability of most public sector
enterprises was recognized. Major reforms such as dismantling of
the system of industrial licensing and the liberalization of foreign
investment regulation have had a beneficial impact on business
opportunities in India. India’s inadequate infrastructure continues to
constitute a bottleneck. Strategically India is slowly coming to grip
with a competitive world in which it has to earn a place rather than
be gurantted one by others. There has been a recognition of the
growing importance of economic diplomacy but this has yet to be
fully translated into policy.

India is culturally rich and diverse and the impact of western culture
will vary from region to region. The size of the population offers
scope of media services specifically aimed at meeting at its demand.
Promotion of India’s unique culture is being given priority by many
state governments in an effort to capture a slice of the international
tourism market. Although poor infrastructure at present limits their
success.

Finally at the end of the article two Asian giants i.e. India and China
are compared, their similarities is shown on the basis of
geographical area, population, GDP etc, and the difference it their
GDP, literacy, inflation rate, foreign exchange reserves etc is
shown.

Question: 2 What were economic and cultural changes

observed while repositioning India.

Ans. Following are some of the changes observed while

repositioning India.

Economic Changes:

India has been characterized as having one of the

world’s most inward-looking economies. Between 1951 and 1993
India’s share of world trade plunged from 2.4 % to 0.5%. The
barriers to entry in some sector were reduced, the unprofitability of
most public sector enterprises was recognized. The balance of
payment of problems of 1990-91 precipitated a crisis resulting in a
process of radical economics reform, constituting a major break with
past policies. Major reforms such as dismantling of the system of
industrial licensing and the liberalization of foreign investment
regulations have had a beneficial impact on business opportunities
in India and radically changed the business environment. Business
is now free to capitalize on the strengths of Indian economy: its
wealth of natural resources, thriving private sector, high level of
skilled labour and well established intuitional framework, including
stock exchanges and a developed legal system.

Transport Infastructure is a major constraint on industry. The rail

system’s shortcomings are such that high-value fright is increasingly
going to road transporting even through India’s road system is
incapable of supporting even the current traffic volume. Recent
deregulation of the air transport sector is beginning to pay dividends
with improvements in services and reduction in charges.

The global information revolution is also fuelling demand for

economic change. The advent of satellite television into India and its
rapid acceptance by the Indian population has ended cultural
isolation and radically altering economic expectations.

Cultural Changes:

India is culturally rich and diverse and the impact of

western culture will vary from region to region. In Bombay, for
example, western influences are already strong as can be seen by
the thriving, western-style entertainment industry (pubs, disco and
nightclubs), although its film industry continues to be an extremely
powerful popular medium for the dissemination of Indian
entertainment and cultural values throughout the Indian diaspora.

The size of India’s population offers scope for media services

specifically aimed at meeting its demands. Promotion of India’s
unique culture is being given priority by many state governments in
an effort to capture a slice of the international tourism market.
Although poor infrastructure at present limits their success.

Question: 3 What are the Strategic pre occupations as

pertaining to India.

Ans: India’s strategic pre-occupations started with 2 issues,

particularly Kashmir and nuclear weapons capability. The Kashmir
dispute with Pakistan is the central issue preventing normal
relations between the two countries. Two wars have been fought
over this. However, growing international concern about the human
rights dimensions of the situation has put increased pressure on the
Indian Government to be more transparent about its role in
managing the tensions within Kashmir.

India’s relations with the major economic powers-particularly the

U.S., Japan, U.K., and Germany now loom much larger on its
political and economic horizons. Moving with the times, India has
recognized Israel, restored diplomatic relations with South Africa
and is looking to strengthen links with the countries of East Asia and
Australia.

The strengthening commercial links between littoral states of the

Indian Ocean is now under examination in both India and Australia.
The growing convergences of interest between Australia and India
are being increasingly recognized as both countries reach out to
participate more actively in the region.

Question 4 : What could be Rediscovering Asia give a

detailed comparison of India and also the differences
observed while Repositioning India.

Was in the hand of Government they were concentrating only on

Public sectors but later they started emphazing on the Private
Sector.
India was following the self reliance patterns in a highly controlled
hicentrally planned and closed economy. India’s trade with the
world was insignificant but now it is rather totally different case
India is producing where it has its strength and importing the one
which rather it is difficult to produce. Thus Import-export is at its
boom. This has lead to the economic reforms and has positioned
itself in the world.

The difference it has observed while repositioning itself are as

shown below during 1990-91’s:
• GDP growth-1980-91: 5.4 per cent per annum
• GDP, 1992: US $ 237.6 billion
• Strong labor unions
• Inflation rate 1992/93: 9.6 per cent
• Industry as share of GDP 1991: 41 percent
• Adult Literacy 1990: 48 per cent
• Food self sufficiency in grains based on Green Revolution
breakthroughs
• Gross domestic savings as ratio of GDP, 1990: 21 per cent
• Foreign exchange reserves, end 1993: US$ 10.2 billion
This figures show up how the economic reforms are done in India.
These fact and figures can explain how India is marching towards
the growth and success it will not be the less time that it would be
converted into a developed country.