8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

1/16

Economic Reforms 1

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

2/16

Economic Reforms 2

Impact of

Reforms in India

Dr. Tarun Das

Economic Adviser, MOF

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

3/16

Economic Reforms 3

A verage GDP Growth rates in 1980s and 1990s (I npercent)S e c t o r s A v e

7t h p l a n1 9 8 6 - 9 0

1 9 9 1 - 9 2 A v e

8t h P l a n1 9 9 2 - 9 7

A v e

9t h P l a n1 9 9 7 - 2 0 0 2

1 9 8 0 s 1 9 9 0 s

A g r i c u l t u r e

& A l l i e d

3 . 4 - 2 . 3 4 . 7 1 . 8 3 . 4 3 . 0

I n d u s t r y 7 . 6 - 1 . 3 7 . 6 4 . 5 7 . 0 5 . 8S e r v i c e s 7 . 4 4 . 9 7 . 5 8 . 1 6 . 9 7 . 6

T o t a l G D P 6 . 0 0 . 8 6 . 7 5 . 5 5 . 6 5 . 8

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

4/16

Economic Reforms 4

India emerged as one of the fastest growing econo

in the last decade (1990s)

1.4

3.4

4.7

6.3

4.7

5.8

10.7

0.0

2.0

4.0

6.0

8.0

10.0

12.0

China Ind

ia

Indon

esia

Japa

n

Mala

ysia

Thailan

d

U.S.A.

Country

Growth

Rates

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

5/16

Economic Reforms 5

Impact on Private sector Participation

Share of private sector in sectoral GDP (in percentage to sectoral GDP)

Year Agri- Mining Manufac Electri- Construc- Trade, Transprt Finance, Commn Total

culture and turing city, gas, tion hotels & storage, insurance, social, GDP

& allied Quarry- Water restau- commu real personal

sectors ing supply rant nication estate services

1980-81 97 25 87 13 84 95 47 71 37 80

1990-91 97 14 81 -10 84 96 47 68 31 75

1999-00 97 15 87 -7 84 98 57 66 33 74

Share of private sector in sectoral investment (in percentage to sectoral GDI)

1980-81 52 7 83 10 58 102 56 90 38 59

1990-91 70 3 81 6 84 82 47 86 18 64

1999-00 72 3 88 14 71 60 44 87 26 71

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

6/16

Economic Reforms 6

India moved on

a higher growth profile 1990s

5.6

1.3

5.9

7.8

5.8

4.0

8.2

4.8

4.4

6.16.5

7.37.3

5.1

0

1

2

3

4

5

6

7

8

9

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

7/16

Economic Reforms 7

Reduction in Current Account Deficit

on External Sector(as % of GDP)

-3.1

-0.3

-1.7

-0.4

-1.0

-1.7

-1.2-1.4

-1.0-1.1

-0.6

0 .3

0 .7 0 .9

-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-0220022003F

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

8/16

Economic Reforms 8

Acceleration in Export Growth Rate

9.0

-1.1

3.3

20.218.4

20.3

5.64.5

-3.9

9.5

19.6

0

1816

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

25.0

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003F

FY 1990 refers to the period April 1990 to March 1991 and so on.

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

9/16

Economic Reforms 9

Substantial increase in Foreign

Investment Inflows

0 .1 0 .10 .6

4 .2

5 .14 .9

6 .1

5 .4

2 .4

5 .2

6 .8

8 .2

5 .6

0

1

2

3

4

5

6

7

8

9

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

in

US$

b

illion

FY 1990 refers to the period April 1990 to March 1991 and so on.

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

10/16

Economic Reforms 10

Significant reduction in External Debt

Service Ratio(% of gross current receipts)

3 5 . 3

3 0 . 2

2 7 . 52 5 . 6 2 6 . 2

2 4 . 3

2 1 . 2

1 9 . 5 1 8 . 71 7 . 1 1 7 . 2

1 3 . 9 1 4 . 7

0

5

10

15

20

25

30

35

40

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

FY 1990 refers to the period April 1990 to March 1991 and so on.

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

11/16

Economic Reforms 11

Significant reduction in External Debt

to GDP ratio (at the end March)

2 8 . 7

3 8 . 73 7 . 5

3 3 . 8

3 0 . 8

2 7 . 02 4 . 6

2 3 . 5 2 2 . 8 2 3 . 4 2 2 . 1 2 2 . 42 1

2 0

0

5

10

15

20

25

30

35

40

45

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

12/16

Economic Reforms 12

Significant reduction in External Debt

to current receipts ratio (end March)

3 2 93 1 2

3 2 3

2 7 6

2 3 6

1 8 9 .1 7 0

1 6 0 1 6 21 4 6

1 2 6 1 2 01 1 0

05 010 015 02 0 02 5 03 0 03 5 0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 20012002 2003

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

13/16

Economic Reforms 13

1 0 . 2

8 .3

7 .0

3 .94 .3

5 .4

7 .2

5 .4

4 .44 .0

3 .5

2 .8

3 .6

0

2

4

6

8

10

12

1991199219931994199519961997199819992000200120022003

Reduction in Short Term Debt to

Total External Debt Ratio (end March)

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

14/16

Economic Reforms 14

3 8 2

1 2 6

2 4 2 1 3 0 3 0 1 9 1 4 1 1 9 6 4 4050100150200250300350400450

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Reduction in Short Term Debt to

Total Foreign Exch. Ratio (end March)

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

15/16

Economic Reforms 15

5 .89 .2 9 .8

1 9 . 3

2 5 . 2 2 6 . 42 9 . 4

3 2 . 5

3 8 . 04 2 . 3

5 4 . 1

7 5 . 4

8 5 . 5

2 1 . 7

-10

0

10

20

30

40

50

60

70

80

90

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Sep

t

in

US$

billion

Substantial Build-up of

Foreign Exchange Reserves

(end March)

8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das

16/16

Economic Reforms 16

THANK YOU