8/14/2019 Impact of Reforms in India-Lecture 2 by Tarun Das
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Economic Reforms 1
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Economic Reforms 2
Impact of
Reforms in India
Dr. Tarun Das
Economic Adviser, MOF
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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
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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
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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
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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
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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
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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.
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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.
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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.
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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
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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
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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)
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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)
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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)
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Economic Reforms 16
THANK YOU
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