Session 1

Analysis of Indian Economic Growth & Development

Since India's economic liberalization in 1991, the country has witnessed significant growth
and development. India has emerged as one of the fastest-growing major economies in
the world, with an average annual GDP growth rate of around 7% over the past two
decades.

One of the major drivers of India's economic growth has been its service sector,
particularly IT and IT-enabled services. India has become a global hub for software
development and business process outsourcing, attracting significant foreign investment.
In addition, India's manufacturing sector has also grown significantly, particularly in the
areas of automobile, pharmaceuticals, and textiles. The government's "Make in India"
initiative has further accelerated the growth of the manufacturing sector by promoting
domestic production and encouraging foreign investment.

However, despite India's impressive economic growth, there remain significant challenges
to its development. The country still faces high levels of poverty, inequality, and
unemployment. In addition, infrastructure development has been lagging, particularly in
the areas of transportation, power, and water supply.

Moreover, India's growth has been uneven across different regions and sectors. While
some parts of the country have seen rapid development and growth, others have been
left behind. This has led to regional disparities and a widening income gap between urban
and rural areas.

To address these challenges, the Indian government has undertaken various policy
initiatives and reforms in recent years. Some of the notable policy initiatives include the
Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), and the Pradhan
Mantri Jan Dhan Yojana (PMJDY).

The GST, which was implemented in 2017, has simplified India's indirect tax system by
replacing multiple taxes with a single tax. This has made the tax system more transparent,
efficient, and business-friendly.

The IBC, which was enacted in 2016, has created a more robust and time-bound mechanism
for resolving insolvency and bankruptcy cases in India. This has improved the ease of doing
business in India and boosted investor confidence.

The PMJDY, which was launched in 2014, has aimed to promote financial inclusion by
providing access to banking services to the unbanked population. This has helped to
reduce poverty and promote inclusive growth.

Moreover, the government has also focused on infrastructure development, including the
development of roads, railways, airports, and ports. This has helped to improve
connectivity and reduce regional disparities

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Table showing India's annual GDP growth rate since 1990:
Year Annual GDP Growth Rate
1990 5.5%
1991 1.1%
1992 5.3%
1993 4.8%
1994 6.4%
1995 7.5%
1996 7.5%
1997 4.4%
1998 6.4%
1999 8.8%
2000 3.8%
2001 4.8%
2002 3.8%
2003 8.3%
2004 7.5%
2005 9.5%
2006 9.7%
2007 9.3%
2008 3.9%
2009 7.9%
2010 10.3%
2011 6.6%
2012 5.5%
2013 6.4%
2014 7.4%
2015 8.2%
2016 8.3%
2017 7.2%
2018 6.8%
2019 4.2%
2020 -7.7% (due to COVID-19 pandemic)

From the table, we can see that India's annual GDP growth rate has been volatile over the
past three decades. The country has experienced periods of high growth, particularly in
the mid-2000s when the economy grew at an average rate of around 9%, and periods of
low growth, such as in 1991 and 2000 when the growth rate was less than 5%.

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In recent years, India's growth rate has slowed down, with the economy growing at a rate
of 4.2% in 2019 and contracting by 7.7% in 2020 due to the COVID-19 pandemic. However,
the government has announced various measures to revive the economy and restore
growth, including the Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) and the
National Infrastructure Pipeline.

Despite the recent slowdown, India's average annual GDP growth rate since liberalization
has been around 7%, which is impressive given the country's size and level of development.
India has emerged as a major player in the global economy and has attracted significant
foreign investment. However, there is a need for continued efforts to address the
challenges of poverty, inequality, and unemployment, and to ensure sustainable and
inclusive growth for all sections of the population.

Here is a table showing the sectoral GDP (in INR) for Agriculture, Industry, and Services
sectors in India in recent years:
Year Agriculture Industry Services
2017 17.67 trillion 36.04 trillion 92.26 trillion
2018 18.55 trillion 39.09 trillion 103.55 trillion
2019 19.50 trillion 41.80 trillion 113.16 trillion
2020 19.50 trillion 38.56 trillion 107.34 trillion

From the table, we can see that the Services sector has consistently been the largest
contributor to India's GDP, accounting for more than 50% of the GDP in recent years. The
Industry sector is the second-largest contributor, accounting for around 25-30% of the GDP.
The Agriculture sector, while still an important sector, has been the smallest contributor,
accounting for around 15% of the GDP.

It is worth noting that the Agriculture sector, despite its relatively small contribution to the
GDP, is still a crucial sector for India's economy as it employs a large proportion of the
population, particularly in rural areas. The government has implemented various policies
and initiatives to promote agricultural growth and improve the livelihoods of farmers.

The Industry sector includes manufacturing, mining, construction, and electricity, and has
been growing rapidly in recent years. The government has been focusing on promoting
the growth of this sector through initiatives such as Make in India and improving the ease
of doing business.

The Services sector includes a wide range of activities such as finance, trade, hospitality,
and transportation, and has been the main driver of India's economic growth in recent
years. The government has been promoting the growth of this sector through initiatives
such as Digital India and Skill India, which aim to harness the potential of technology and
human resources.

Overall, while the Services sector has been the main driver of India's economic growth,
there is a need for continued efforts to promote growth and development in all sectors,
particularly in Agriculture, which is still a crucial sector for India's economy and population.

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Sectoral GDP (in INR) for Agriculture, Industry, and Services sectors from 1990
Year Annual GDP Growth Rate Agriculture Industry Services
1990 5.5% 29.8% 25.4% 44.8%
1991 1.1% 29.4% 24.6% 45.9%
1992 5.3% 28.6% 26.0% 45.4%
1993 4.8% 27.5% 26.0% 46.5%
1994 6.4% 26.5% 26.5% 47.0%
1995 7.5% 25.6% 26.9% 47.5%
1996 7.5% 24.9% 27.5% 47.6%
1997 4.4% 24.5% 28.0% 47.6%
1998 6.4% 23.8% 28.2% 48.0%
1999 8.8% 22.6% 28.2% 49.2%
2000 3.8% 22.3% 27.7% 50.0%
2001 4.8% 22.2% 27.5% 50.2%
2002 3.8% 21.8% 27.6% 50.6%
2003 8.3% 20.5% 27.8% 51.7%
2004 7.5% 19.9% 28.1% 51.9%
2005 9.5% 19.5% 28.1% 52.4%
2006 9.7% 18.9% 28.3% 52.8%
2007 9.3% 18.2% 28.6% 53.2%
2008 3.9% 17.6% 28.9% 53.5%
2009 7.9% 17.1% 28.9% 54.0%
2010 10.3% 16.1% 29.2% 54.7%
2011 6.6% 15.2% 29.3% 55.5%

Year Annual GDP Growth Rate Agriculture Industry Services

2012 5.5% 14.6% 28.5% 56.9%
2013 6.4% 14.1% 27.9% 58.0%
2014 7.4% 13.9% 27.5% 58.7%
2015 7.6% 13.8% 27.3% 58.9%
2016 7.1% 13.7% 27.2% 58.9%
Source: Trading Economics

As we can see from the table, the contribution of Agriculture to the GDP has been steadily
decreasing over the years, from 29.8% in 1990 to 13.7% in 2016. Industry's contribution to
the GDP remained relatively stable from 1990 to 2010, ranging from 24.6% to 29.2%, before
slightly decreasing to 27.2% in 2016. The Services sector has been the largest contributor to
India's GDP since 1990, and its contribution has been steadily increasing from 44.8% in 1990

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to 58.9% in 2016. This highlights the shift in the Indian economy from an agriculture-based
economy to a more service-based economy.

The table above shows the sectoral GDP contribution of agriculture, industry, and services
to India's overall GDP from 1990 to 2016. One of the key trends we can observe is the
gradual decline in the contribution of agriculture to the overall GDP, while the share of
services has been steadily increasing.

This shift in the economy from an agriculture-based economy to a more service-based

economy can be attributed to various factors such as technological advancements,
demographic changes, and government policies. The Green Revolution in the 1960s and
70s, which led to a significant increase in agricultural productivity and output, helped to
reduce the share of agriculture in the overall economy. As the productivity of the
agricultural sector increased, fewer workers were needed to produce the same amount of
output, and many people moved out of agriculture into other sectors.

Additionally, with the rise of globalization and liberalization, the Indian economy became
more open to trade and investment, which led to the growth of the services sector. The
services sector has been able to leverage India's large English-speaking workforce and low-
cost labor to become a significant player in the global economy, particularly in areas such
as IT and business process outsourcing.

It is important to note that while the services sector has become the largest contributor
to India's GDP, there are still significant challenges in terms of job creation, income
inequality, and regional disparities. The agriculture sector, in particular, continues to face
challenges such as low productivity, lack of access to credit and markets, and climate
change. The government's policies and investments will play a crucial role in addressing
these challenges and ensuring sustainable economic growth and development for all
sectors of the economy.

Major Challenges of Globalization

While globalization has brought many benefits to India, such as increased trade,
investment, and economic growth, it has also presented several challenges that the
country has had to grapple with. Here are some of the major challenges post-globalization
in India:
1. Job creation: While the Indian economy has been growing rapidly since the 1990s,
job creation has not kept pace with the growth of the labor force. The high rate of
population growth, coupled with the low level of skill and education among a large
portion of the workforce, has led to a situation where there are many more job
seekers than available jobs. This has resulted in high rates of unemployment and
underemployment, particularly in the rural areas.
2. Income inequality: While the overall economic growth has been impressive, it has
not been evenly distributed across the population. There is a significant gap
between the rich and the poor, and this gap has been widening in recent years. This
has led to social and political tensions, and there is a risk that it could lead to
instability in the future.

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 3. Regional disparities: Economic growth has been concentrated in certain regions of
the country, particularly in the urban areas, while many rural areas have been left
behind. This has led to a situation where there are significant regional disparities in
terms of income, infrastructure, and access to basic services.
4. Environmental degradation: Rapid economic growth has led to increased pressure
on the environment, particularly in terms of pollution and resource depletion. The
rapid pace of urbanization and industrialization has led to air and water pollution,
deforestation, and soil degradation, which pose a threat to the health and well-
being of the population, as well as to the sustainability of the economy.
5. Governance and corruption: India has struggled with issues of governance and
corruption, which have hindered its ability to fully realize the benefits of
globalization. Corruption has been a persistent problem in many sectors of the
economy, and it has led to inefficiencies, delays, and misallocation of resources.
The government has taken steps to address these issues, but progress has been
slow.
6. Infrastructure deficit: While India has made significant progress in developing its
infrastructure over the past few decades, it still faces significant challenges in this
area. The country's infrastructure deficit includes insufficient power supply, poor
quality roads and transportation networks, inadequate water and sanitation
facilities, and limited access to healthcare facilities. This has resulted in higher costs
for businesses, reduced productivity, and reduced quality of life for many citizens.
7. Trade imbalances: While India has become a significant player in the global
economy, it still faces challenges in terms of trade imbalances. The country has a
large trade deficit, which means that it imports more goods and services than it
exports. This has put pressure on the country's foreign exchange reserves and has
made it vulnerable to external shocks.
8. Technological disruption: As the world becomes increasingly digital and connected,
India faces the challenge of keeping up with technological advancements. While
the country has a large pool of IT professionals and has made significant progress
in areas such as e-commerce and mobile technology, there is still a significant digital
divide, particularly in rural areas. This could lead to further social and economic
inequalities if not addressed.
9. Social and cultural tensions: Globalization has also led to social and cultural tensions
in India. As the country becomes more connected to the world, there is a risk of
cultural homogenization and the erosion of traditional values and practices. This
has led to debates about the role of globalization in shaping Indian identity and
culture.
10. Geopolitical challenges: Finally, India faces several geopolitical challenges in the
post-globalization era. These include tensions with neighboring countries, such as
Pakistan and China, as well as broader issues such as climate change, migration, and
terrorism. These challenges have implications for India's economic growth and
security, and require a nuanced and strategic approach to address them.

In conclusion, while globalization has brought many opportunities to India, it has also
presented several challenges that the country needs to address in order to achieve
sustainable economic growth and development for all its citizens. The government, civil

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society, and private sector need to work together to address these challenges and ensure
that the benefits of globalization are shared more equitably.

Comparative case on growth and development between India and China

India and China are two of the fastest-growing economies in the world, and both countries
have experienced significant economic growth and development over the past few
decades. However, there are also significant differences between the two countries in
terms of their economic models, political systems, and development trajectories. Here are
some key differences and similarities between the growth and development of India and
China:

1. Economic growth: Both India and China have experienced rapid economic growth
over the past few decades. However, China's growth rate has been consistently
higher than India's. According to World Bank data, China's average GDP growth
rate between 1990 and 2020 was 9.6%, while India's was 6.8%. This can be attributed
to China's more export-oriented and manufacturing-driven economic model, which
has allowed it to take advantage of global trade and investment flows more
effectively than India.

2. Poverty reduction: Both India and China have made significant progress in reducing
poverty over the past few decades. According to the World Bank, between 1990
and 2015, the percentage of the population living in extreme poverty (less than
$1.90 per day) fell from 61% to 12% in China and from 49% to 14% in India. However,
China has been more successful in reducing poverty at a faster pace, thanks to its
more proactive government policies and investments in infrastructure and
education.

3. Income inequality: Both India and China have significant income inequalities.
However, China has been more successful in reducing income inequality than India.
According to World Bank data, China's Gini coefficient (a measure of income
inequality) fell from 0.50 in 2000 to 0.39 in 2018, while India's rose from 0.32 in 2000
to 0.35 in 2019. This can be attributed to China's more proactive policies to
redistribute wealth and its focus on developing a more equitable social welfare
system.

4. Urbanization: Both India and China have experienced significant urbanization over
the past few decades. However, China has urbanized at a much faster pace than
India. According to the World Bank, in 2019, China's urban population was 60% of
its total population, while India's was only 35%. This can be attributed to China's
more centralized and proactive urbanization policies, as well as its focus on
developing large-scale infrastructure projects such as high-speed rail networks and
new cities.

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 5. Political systems: India and China have different political systems, which have
influenced their approaches to economic growth and development. India is a
democratic country with a federal system of government, while China is a one-party
communist state. India's democratic system has led to a more decentralized
approach to economic policymaking, which has resulted in a more fragmented and
uneven development trajectory. China's centralized system has allowed it to
pursue more coordinated and strategic economic policies, which has resulted in a
more focused and rapid development trajectory.

6. Foreign direct investment (FDI): China has been more successful in attracting FDI
than India. According to the United Nations Conference on Trade and Development
(UNCTAD), China was the second-largest recipient of FDI in the world in 2020, while
India was ranked ninth. This can be attributed to China's more investor-friendly
policies, as well as its greater focus on export-oriented manufacturing.

7. Innovation and technology: Both India and China have made significant strides in
innovation and technology. However, China has been more successful in
developing cutting-edge technologies and building a more advanced technological
infrastructure. According to the World Economic Forum's Global Competitiveness
Report 2019, China ranked 28th in the world in terms of technological readiness,
while India ranked 80th. This can be attributed to China's greater investment in
research and development, as well as its focus on building large-scale technological
infrastructure projects.

8. Environmental sustainability: Both India and China face significant environmental

challenges as a result of their rapid economic growth and development. However,
China has been more proactive in addressing these challenges than India.
According to the 2020 Environmental Performance Index (EPI), China ranked 120th
in the world in terms of environmental sustainability, while India ranked 168th. This
can be attributed to China's more proactive policies to reduce pollution and
promote clean energy, as well as its greater investment in environmental
infrastructure.

Overall, while India and China have experienced significant economic growth and
development over the past few decades, there are significant differences between the
two countries in terms of their development trajectories, policy approaches, and socio-
economic systems. Both countries face significant challenges and opportunities in the
coming years, and their ability to navigate these challenges and take advantage of these
opportunities will be shaped by their unique economic and political contexts.
Globalization opportunities for India.

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Globalization has presented India with several opportunities, some of which are:

1. Trade opportunities: Globalization has opened up new markets for Indian goods
and services, providing Indian businesses with greater access to global markets.
This has helped increase India's trade and exports, which has contributed
significantly to its economic growth.
2. Foreign direct investment (FDI): Globalization has led to increased foreign
investment in India, as global companies seek to take advantage of the country's
large and growing consumer market, as well as its skilled workforce and relatively
low labor costs.
3. Technology transfer: Globalization has facilitated the transfer of technology and
know-how to India, as global companies set up research and development centers
in the country or collaborate with Indian firms to develop new products and
services.
4. Skilled workforce: Globalization has led to the development of a highly skilled and
educated workforce in India, which has helped the country become a leading
provider of IT and software services, as well as a hub for innovation and
entrepreneurship.
5. Cultural exchange: Globalization has also facilitated greater cultural exchange
between India and the rest of the world, providing Indians with greater exposure
to global cultures and ideas, as well as opportunities for cultural exchange and
dialogue.
6. Access to capital: Globalization has provided India with greater access to capital,
both through foreign investment and international capital markets. This has
enabled Indian businesses to finance their growth and expansion more easily, and
has helped attract more investment to the country.
7. Tourism: Globalization has also led to an increase in tourism to India, as more and
more travelers from around the world visit the country to experience its rich
culture, history, and natural beauty. This has helped boost the tourism industry in
India, creating jobs and supporting local businesses.
8. Education and research: Globalization has also facilitated greater collaboration
between Indian and foreign universities and research institutions, enabling the
exchange of ideas and knowledge across borders. This has helped Indian students
and researchers gain access to world-class education and resources, and has also
helped India become a hub for innovation and research.
9. Infrastructure development: Globalization has led to increased investment in
infrastructure development in India, particularly in areas such as transportation,
energy, and communications. This has helped improve the country's connectivity
and competitiveness, and has created new opportunities for businesses and
entrepreneurs.
10. Cross-border collaborations: Globalization has enabled India to collaborate with
other countries in various fields such as science, technology, business, and culture.
These collaborations have led to joint ventures, knowledge sharing, and capacity
building initiatives, which have helped Indian businesses and institutions to gain a
global perspective and to compete effectively in the global arena.
11. Diversification of exports: Globalization has led to a diversification of India's export
basket, with the country now exporting a wider range of products and services to

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 more destinations around the world. This has helped reduce the country's
dependence on a few key markets and products, making it more resilient to
external shocks and economic downturns.
12. Entrepreneurship: Globalization has created new opportunities for
entrepreneurship and innovation in India, particularly in sectors such as IT and e-
commerce. This has led to the growth of a vibrant start-up ecosystem in the
country, with Indian entrepreneurs and innovators now competing on a global
stage.
13. Environmental sustainability: Globalization has also created opportunities for India
to work with other countries on environmental sustainability issues such as climate
change, energy transition, and sustainable development. This has helped India to
adopt more sustainable practices and technologies, and to position itself as a
leader in the global push towards a more sustainable future.

Overall, globalization has provided India with a range of opportunities to further its
economic and social development, and has helped the country become a major player in
the global economy. However, the benefits of globalization have not been evenly
distributed, and many Indians continue to face significant challenges in terms of poverty,
inequality, and access to basic services. As such, India will need to continue to innovate
and adapt in order to ensure that the benefits of globalization are shared more equitably
across society.

In conclusion, while globalization has presented India with several opportunities for
growth and development, it has also posed significant challenges and risks. India will need
to continue to navigate the complex and rapidly changing global landscape, and to
innovate and adapt in order to leverage the opportunities presented by globalization and
to address the challenges it poses.

Furthermore, it is important for India to ensure that the benefits of globalization are
shared more equitably across society, particularly in terms of reducing poverty and
inequality, improving access to basic services such as healthcare and education, and
promoting inclusive economic growth. This will require a concerted effort on the part of
the government, businesses, civil society, and other stakeholders to ensure that
globalization works for everyone, not just a few privileged individuals or groups.
In addition, India will need to continue to address the environmental and social impacts of
globalization, particularly in terms of reducing carbon emissions and other forms of
pollution, protecting natural resources and ecosystems, and promoting sustainable and
equitable development. This will require a shift towards more sustainable production and
consumption patterns, as well as greater investment in clean technologies, renewable
energy, and green infrastructure.

Overall, while globalization has presented both opportunities and challenges for India, it
is clear that the country will continue to be a major player in the global economy and a key
driver of global growth and development in the years to come. By leveraging the
opportunities presented by globalization and addressing the challenges it poses, India can
continue to build a more prosperous, sustainable, and inclusive future for all its citizens.

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