India

A growing economy

India: rising GDP growth

% average annual GDP growth

1900 1950 1950 1980 1980 2002 2002 2006

1.0 3.5 6.0 8.0

What do these figures tell you about the Indian economy?

Population growth
% average annual growth

1901 1950 1951 1980 1981 1990 1991 2000 2001 2010

1.0 2.2 2.1 1.8 1.5

What do these figures tell you about population growth in India?

Adult literacy rates

1950 1990 2000 2010 (projected)

% 17 52 65 80

What do these figures tell you about changes to education in India?

People categorised as middle class

% of population 1980 2000 2010 (projected) 8 22 32 Million People 65 220 368

What do these figures tell you about the service sector economic growth in India?

Poverty statistics
Estimates of those in poverty
1980 2000 2010 (projected) 46% 26%

16%

1% of the people have been crossing poverty line each year for 20 years. Equals 200 million people.

What do these figures tell you about anti-poverty strategies in India?

Productivity is rising

30% to 40% of GDP growth is due to rising productivity

India is now the 4th largest economy

It will overtake Japan between 2012 and 2014 to become the 3rd largest world economy

DRIVERS OF GROWTH

India
Domestic Services Consumption High tech, capital intensive industry

East and S.E. Asia

Exports Manufacturing Investment Low tech, labour intensive industry

What is the implication of the Indian model?

Has India skipped the industrial revolution? How does India take its people from farms to cities?

Rise of globally competitive Indian companies:

Reliance, Jet Airways, Infosys, Wipro, Ranbaxy, Bharat Forge, Tata Motors, TCS, Bharati, ICICI and HDFC Banks

Demographic trend points to sharp increases in input factors

Demographic Split

54%

0-25 yrs

46%

25+ yrs

1,600 1,400 1,200 1,000 800 600 400 200 0

1.5 bn 1.1 bn

800 420 2005 2025

Labor Force

Labor Force will double in the next 20 years

Demographic trend points to sharp increases in input factors

Age Dependency
80% 60% 40% 20% 0% 1980's 2002 2025 China 2002 72% 62% <50 % 45%

Savings Rate
50% 40% 30% 20% 10% 0% 1980's 2002 2025 China 2002 17% 24% 35+% 42%

Higher savings and investment rate will translate into higher GDP growth

By 2010 India will have worlds largest number of English speakers When 300 million Indians speak a word in a certain way, that will be the way to speak it.
-Prof. David Crystal, Cambridge Encyclopedia of the English Language