Overview of

The Indian
Economy
Content ONLY - Not Design

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 Powering India’s Vision Through Reforms

Economic
Prime Minister Shri Narendra Modi has laid down India’s vision
to become a US$5 trillion economy by 2025, and to achieve
this goal India needs to shift its gears to accelerate and
sustain a real GDP growth rate of 8%. Such growth can only

Snapshot
be sustained by a “virtuous cycle” of savings, catalysing
investment and exports and supported by a favourable
demographic phase.

Investment, especially private investment, drives demand,

creates capacity, increases labour productivity, introduces new
technology, allows creative destruction, and generates jobs.
Hence, the government continues to push for transformative
reforms to attract more investments and make India an
economic powerhouse across Asia-Pacific and beyond.

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Advantage India
What Gives India an Edge Over Other Countries:

1 2 3
A Strong Demographic Dividend Vast Market Base A Large English Speaking
➔ 2nd largest population base -- hosts
Population
➔ By 2030: Average age of India’s
workforce will be 32 years 18% of world’s population India has a large English speaking
population, which is useful for
➔ Window of demographic dividend ➔ By 2030: One in two households
business purposes in a globally
opportunity available till 2055 -- expected to be middle-class
connected world
longer than any other country
➔ Only 5% of India’s population will be
➔ Large window can facilitate skilling poor, 51% of Indian households will
working age population which can earn over US$8,500 per annum
power economic growth

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Advantage India

4 5
A Growing Skilled Workforce
A Rapidly Liberalizing Economy
➔ In July 1991, India embarked on its journey of Required to create 8.1 million jobs annually, India has steadily
economic liberalization increased budget allocation:

➔ Several industries deregulated, state owned ➔ In 2015: Government launched Skill India to train 400
enterprises privatized and government opened million people by 2022
its doors to FDI
➔ 2017-18 -- Budget allocation for Skilling India US$331.83m
➔ 2014 onwards: India’s FDI’s policies have been
progressively and steadily liberalised by GoI -- ➔ 2018-19: US$478.87m allocated for Skilling India
FDI reforms made in defense, construction,
single brand retail, manufacturing, aviation, ➔ 2030: India projected to have a skilled labour surplus of
communications, financial sector and more 245 million workers -- Talent surplus in financial services,
technology, media, telecommunications and manufacturing

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Status Of Domestic Economy
Investors can look at India’s economic parameters, which reflect positive outcomes:

➔ India is one of the Fastest Growing Major Economy in the ➔ Past five years have seen record FDI equity inflows:
world with a GDP of over US$2.6 trillion
● 2016-17: US$60.08 bn
➔ India has become 7th largest economy in the world
● 2017-18: US$44.85 bn
● 2013-14: 11th largest
● 2018-19: US$44.36 bn
● 2019-20: 7th largest
➔ A Steady Rise in Exports
➔ 2014-15 to 2018-19 - 7.5% average GDP growth clocked
in past 5 fiscals
● 2013-14: 3.98% rise to reach US$312.35 bn
➔ First quarter of 2019: 5% GDP growth (Government has
taken measures)
● 2018-19: 8% rise in exports to reach US$535.5 bn

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Status Of Domestic Economy
➔ A Decline in Gross Fiscal Deficit Ratio: ➔ Transparent and simplified tax policies Increased Tax
Collections
4.5% 3.4%
2013-14 2018-19 ● In 2013-14: 12.5% rise in tax collection

● In 2018-19: a massive 78% rise in tax collection

➔ Foreign Exchange Reserves Grown Progressively
➔ Total Merger and Acquisition (M&A) activity:
● March end, 2013: US$292.0 bn
Grew 104.5% year-on-year to reach US$ 129.4 bn in 2018
● December 21, 2018: US$ 393.29 bn

● August 2019: 430.572 bn

➔ Index of Industrial Production (IIP):

4.4% 3.6%
2017-18 2018-19:
(The moderation in 2018-19 has been mainly on account of
subdued manufacturing activities in Q3 and Q4 )

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Government Measures
2014 onwards:Initiatives and Incentives to spur Growth:

To strengthen Banks and foster clean and responsible

Simplified Labour Laws banking, the Government followed the 4 R approach of
Recognition, Resolution, Recapitalization and Reforms
Reforms in Corporate Affairs
● Speeded up recognition and resolution of non-
Introduction of E-Clearances performing loans and other stressed assets
● A large recapitalization programme for public
banks launched in 2017
Rolled back a levy on foreign funds
● Proposed further recapitalisation of public sector
banks (PSBs) with infusion of over US$10.2 bn
Relaxed foreign direct investment rules ● Merger of several public banks
● Out of 18 public sector banks, 14 are in profit-
Easier KYCs for investors in Capital Markets earning situation

More support to NBFCs/HFCs and MSMEs

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Government Measures
Big Ticket Reforms In Taxation:

1 2 3
Goods & Cut Corporate tax from 30% to 22% Economic Focus on Virtuous Cycle of Savings, investment
and exports for Sustainable Growth in Economy

Services ● Reduction in GST returns and

simplification of forms ● For India Inc: in 2019, US$9.86 bn package for

Tax ●
●
Refund process of GST simplified
Risk based approach in dealing with ●
stressed exporters and real estate
Changes in customs duties to promote investment
tax payers under Make in India
● Withdrawal of Angel Tax for Startups ● Interest subvention scheme for MSMEs: US$51.1 m
allocated for 2019-20
● US$980 mn, all-time high allocation for MSMEs;
given an Export Promotion Cell
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Winning Policies

India’s Transformative, Path-Breaking

Policies That Impacted the Economy
The Insolvency & Bankruptcy Code (IBC) Bolstering Real Estate with RERA:
➔ 2016: was introduced for the speedy resolution of ➔ The introduction of Real Estate (Regulation and
insolvency and bankruptcy cases of companies Development) Act, 2016 seeks to protect home-
buyers as well as help boost investments in the real
➔ 2019: Nearly 1,500 Corporate Debts have been brought
estate industry
before Corporate Insolvency Resolution Process (CIRP)
and 142 have already been closed, while 63 have been
withdrawn.

➔ 302 cases have ended in liquidation, while the resolution

plans have been approved in 72 cases.

➔ Recovery of US$58.4 bn in last four years due to

Insolvency and Bankruptcy Code

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Winning Policies
Goods & Services Tax: One Nation, One market, One tax

● A unified nation-wide single tax regime that replaced 17 indirect

taxes and a host of cesses
● Has expanded India’s tax base to a large extent
● Strengthened the financial ecosystem, while aiding productivity
● Removal of cascading effect of taxes i.e. removes tax on tax

Pradhan Mantri Karam Yogi Maandhan - Pension benefits for

retail traders, small shopkeepers

Scheme of faceless electronic tax assessment - Aadhaar

and PAN to become interchangeable

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Opening The Doors To FDI
The NDA government has been liberalizing India’s FDI regime faster than any of
its recent predecessors. By May 2017, 21 sectors covering 87 areas of FDI policy
had undergone reforms. From 2014 onwards:

2014 2015 FDI reforms has triggered

record FDI inflows:
➔ FDI in defense increased ➔ Increases FDI cap on insurance and
from 26% to 49% pension firms to 49%
● 2014-15 to 2018-19 total FDI
➔ FDI in railways allowed at ➔ Allows private sector, including foreign- inflows has been US $ 286 bn
100% owned firms to establish merchant
coal operations ● 2009-10 to 2013-14 total FDI
inflow is US$ 189bn
➔ FDI related reforms in 15 major sectors
such as construction, banking private
● 2018-19: India’s FDI inflows at
sector, retail, duty-free shops, defense,
US$64.37 bn marking a 6% growth
media, airlines

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Opening The Doors To FDI
2016
➔ FDI above 26% in insurance and pensions via automatic route

➔ FDI in marketplace ecommerce authorized at 100% with conditions

➔ FDI in asset construction companies moved to automatic route

2019
➔ Eased rules for overseas single-brand stores allowing FDI through
automatic route in contract manufacturing and all areas of coal mining

➔ Single brand retail sourcing norms eased- will help foreign brands to set
up physical stores and move online

➔ Easing local sourcing norms for FDI in Single Brand Retail Trading
(SBRT)

➔ 26% FDI limit extended to digital media

➔ Limit for insurance intermediaries raised to 100%
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Liberalisation to boost economy
Government of India has given ‘in-principle’ approval
for strategic disinvestment of five Central Public
Sector Enterprises (CPSEs)
◆ Bharat Petroleum Corporation Ltd (BPCL)
◆ Shipping Corporation of India
◆ Container Corporation of India
◆ Tehri Hydro Power Development Corp Ltd (THDCIL)
◆ North Eastern Electric Power Corp Ltd (NEEPCO)
➔ The move will include sale of majority or full stake of the Central
Government in the entities and transfer of management control
➔ The sale plan, a part of Budget 2019-20, will commence following
clearance from the Cabinet Committee on Economic Affairs (CCEA)
➔ Apart from these five, Government of India has also given ‘in-principle’
approval for strategic disinvestment of 28 other CPSEs
➔ In certain other CPSEs, a policy of minority stake sale without transfer
of management control is being followed to unlock value
➔ Government of India has set a target of US$14.6bn disinvestment
revenue for 2019-20, as per the Budget announced in July 2019

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Liberalisation to boost economy
Government of India has given ‘in-principle’ approval for strategic disinvestment of 28
Central Public Sector Enterprises (CPSEs)

➔ Project & Development India Ltd ➔ Hindustan Fluorocarbon Ltd. (HFL) (sub.) ➔ Indian Medicine & Pharmaceuticals
Corp Ltd (IMPCL)
➔ Hindustan Prefab Ltd (HPL) ➔ Central Electronics Ltd
➔ Karnataka Antibiotics
➔ Hospital Services Consultancy Ltd ➔ Bharat Earth Movers Ltd (BEML)
(HSCC) ➔ Kamarajar Port
➔ Ferro Scrap Nigam Ltd (sub.)
➔ National Project Construction Corp ➔ Indian Tourism Development Corp
(NPCC) ➔ Cement Corp of India Ltd (CCI) (ITDC)m

➔ Engineering Project (India) Ltd ➔ Nagarnar Steel Plant of NMDC ➔ Rural Electrification Corp Ltd (REC)

➔ Bridge and Roof Co. India Ltd ➔ Alloy Steel Plant, Durgapur; Salem Steel ➔ Hindustan Petroleum Corp Ltd
Plant; Bhadrawati units of SAIL
➔ Pawan Hans Ltd. ➔ Hindustan Antibiotics Ltd. (HAL)
➔ Air India, five subsidiaries and one JV
➔ Hindustan Newsprint Ltd (subsidiary) ➔ Bengal Chemicals and
➔ Dredging Corporation of India Pharmaceuticals Ltd. (BCPL)
➔ Scooters India Ltd
➔ HLL Life Care
➔ Bharat Pumps & Compressors Ltd

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Five Year Achievements
Key Achievements of the NDA Government

INFRASTRUCTURE GOES GLOBAL

Government Efforts:
● Since 2008 to 2017, India has invested about US$1.1
trillion on infrastructure and the sector has attracted global
investors
● 2014: 12 km of road was built; In 2019 : it is 30 km a day
● Increase in National Highway length:

92,851 kms 122,434 kms

2014 2018

● Task force set up to draw up a National Infrastructure

Pipeline to list projects for five years from FY 2021 to 2025.

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Infrastructure Boost
➔ UDAAN scheme launched in 2017 to foster

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regional connectivity by extending flight
connectivity to Tier-3 and Tier-4 towns in the
country
➔ 4.94 km long Bogibeel bridge in Assam was
inaugurated in December 2018; it is the second
longest rail-cum-road bridge in Asia.
➔ From 2014-15 to 2018-19: Major Road Works
Built
Eastern and Western Peripheral Expressways around
Delhi, Delhi Meerut Expressway, Chenani-Nashri tunnel
in Kashmir, Dhola –Sadiya Bridge over Brahmaputra in
Assam.

IMPACT
In 2018, infrastructure sector in India witnessed
private equity and venture capital investments
worth US$1.97Bn

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Achievement: Smart Cities
Soldier Ahead

THE SMART CITIES Mission has ➔ STATUS: 19 July 2019, 3700 projects

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become one of the government’s worth about Rs. US$19.15 bn have been
high-profile projects tendered
➔ Out of which work orders have been issued
for 2,900 projects worth more than
Aims to set up 100 sustainable urban
centres with a budget of over US$30 bn US$12.68bn
➔ 900 projects worth more than US$2.11 bn
to drive economic development. 100
cities have been selected for have been completed.
➔ Most cities are actively working on areas like
development as Smart Cities in four
urban spaces, Solar Energy, Safety, Public
rounds over a period of two and a half
Transport, Complete Streets, and improved
years from January 2016 to June 2018. Citizen Services and so on.

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India: 3rd Biggest Start-up
Hub in the World
India’s VIBRANT Start-up ecosystem with 54 tech Unicorns expected by 2024, is

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another feather in the government’s cap

Government Efforts
➔ 3,18,506 users registered on Startup India Portal

➔ 19,247 Startups recognized by Department for Promotion of Industry and Internal Trade (DPIIT)

➔ Start-up India Hub: A dedicated team has been set up under Invest India

Government Initiatives
➔ Faster exit for start-ups

➔ Providing Funding Support through a Fund of Funds with a Corpus of Rs. 10,000 crore

➔ US$228.98m have been invested into 247 startups

➔ Tax exemption on Capital gains

➔ Harnessing Private Sector Expertise for Incubator Setup

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Start-Up Programs
Government launches Atal Innovation Mission
● 102 Incubation Centres selected

● US$1.41m to be given to each centre over 5 years

● US$8.2m disbursed to 31 New Incubation Centres

● US$5.48m disbursed to 8 Established Incubation Centres

Other Initiatives
● Setting up of 7 New Research Parks Modeled on the Research Park
Setup at IIT Madras

● US$1.2m disbursed to 13 Bio-incubators (BIRAC SEED FUND)

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Achievement: India Goes Digital
NDA Government’s inclusive Digital program has transformed India

4 Policy Impact:

➔ It is the second fastest digitizing economy among 17 leading economies in the world

➔ Economic value of India’s digital economy is US$200 bn

➔ India’s digital consumer base is the second largest in the world

➔ India’s digital leap is empowering and inclusive

➔ 45% of 293 new million Internet subscribers over the last four years come from states with
low per capita GDP

➔ India has nearly half a billion internet users and their number is rising rapidly in every part of the
country. This will create a huge market for a host of digital services, platforms, applications,
content, and solutions

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India Goes Digital
India is one of the top countries globally on key
aspects of digital adoption. It has :
➔ 1.2 billion people with unique digital identity

➔ 560 million Internet subscriptions

➔ 354 million smartphone devices

➔ 8.3 Gb per month data consumption per data subscriber

➔ 17 hours per week spent on social media

India has nearly half a billion internet users and their number is rising
rapidly creating a huge market for a host of digital services, platforms,
applications, content, and solutions

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Achievement: Sagarmala To Space
One of the biggest achievement in the past five years has
been the launch of a port-led development programme, the
Sagarmala - on April 2016

AIM: To reduce the logistics cost for EXIM and domestic trade

Until now:
● 89 projects have been completed

● 443 projects worth US$57bn are under implementation and

development.

● 14 CEZs (coastal economic zones) in 8 states have been identified

under the Sagarmala Programme

● 6 new port locations, namely – Vadhavan (Maharashtra,Enayam

(Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha),
Sirkazhi (Tamil Nadu), Belekeri (Karnataka) have been identified

● 53 projects identified, US$148.73m sanctioned and US$80.28m

funds released
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Boosting Inland Waterways
2018: A landmark year for Inland Waterways
Transport -- seen as cheaper and more
environmentally- friendly transport

➔ Multi-modal terminal on River Ganga at Varanasi

inaugurated

➔ Movement of container cargo from Kolkata to Varanasi

on river Ganga commenced

➔ Commencement of integrated movement of cargo from

Kahalgaon in Bihar to Pandu in Assam over three
waterways – Ganga, Brahmaputra

➔ Indo Bangladesh Protocol Route established

➔ Inauguration of a modernized international cruise

terminal at Chennai Port and the launch of Mumbai-Goa
cruise service

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Achievement: India’s Space Mission
Soars High
➔ India has emerged as a world leader in space technology
applications Major Achievements:
➔ Premier space agency the Indian Space Research ➔ India has undertaken 110 space missions
Organisation (ISRO)’s annual budget has significantly
increased in the past five years: ➔ ISRO developed and refined the Polar Satellite
Launch Vehicle (PSLV) to place satellites in low

US$845m $1.45 bn earth and sun synchronous orbits. With 46

successful missions, PSLV has an enviable record.
2014 2019
➔ Geosynchronous Satellite Launch Vehicle (GSLV)
➔ New Space India Limited (NSIL), under the Department of carrying a 3.5 MT payload into a geostationary orbit
Space started in March 2019 to commercially exploit has undertaken three missions
emerging global space industry
➔ ISRO developed commercial capability to launch
satellites

● 239 satellites commercially launched by Antrix

Corporation Limited in three years
● Total revenue from operations during the last
three years: US$ 885.78 million

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India’s Star Sectors That Shine

IT-ITES: India’s Champion Sector

Achievements
The government identified Information Technology as one of 12
champion service sectors for which an action plan is being ➔ India’s IT industry contributes around 7.7 % to the
country’s GDP and is expected to contribute 10% of
developed
India’s GDP by 2025.
● US$ 745.82 million fund set up by government to realise the ➔ Indian IT-ITeS industry’s revenue posted by Indian
potential of these champion service sectors firms has increased over the years

US$118.8 bn US$181 bn
· 2014-15 2018-19

➔ 2018-19: export revenue too shot up to US$137bn

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IT-ITes
Achievements:
➔ 1,000 global delivery centres operated by Indian IT & ITeS
firms in more than 80 countries

➔ 200 Indian IT & ITeS firms led by TCS, Wipro, Infosys, Tech
Mahindra are expanding globally

➔ Leading sourcing destination across the world, holding 55%

market share of US$185-190 bn global services sourcing
business in 2017-18

A Bright Future
National Policy on Software Products-2019 is targeting a US$70-80
bn software sector by 2025

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India’s Thriving Pharma
Features: Achievements
➔ Largest manufacturer of generic drugs in ➔ Leading supplier to US and UK
the world
➔ Affordable innovation driven pharma production
➔ India’s pharmaceutical industry is valued at costs in India
US$55bn
➔ 3,000 pharma companies and 10,500 pharma
manufacturing units operate in India
A Bright Future ➔ Foreign firms such as Pfizer, Merck, Sanofi,
GlaxoSmithKline, Roche, Teva have bases in India
➔ Pharma Vision 2020 aims to make India a global
leader in end-to-end drug manufacturing ➔ Increase in Pharmaceutical export revenue from:

➔ 3rd largest pharmaceutical market expected in India

by 2020 in terms of incremental growth
US$13.6bn US$17.27 bn US$19bn
2014-15 2017-18 2018-19

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India’s Towering Telecom
India ranks second in the world in terms of number of Since 2014:
telecommunication subscriptions, internet subscribers and app
6X increase in government
downloads
spending
Achievements
51,000 km of Optical Fibre Cable
➔ Fastest growing market for mobile applications (OFC) laid
➔ Over 75 per cent increase in internet coverage – from 251
million users to 446 million

Government expenditure on telecommunication infrastructure and

services have shot up:
2009-14 : US$ 1.41 bn

2014-19: US$ 8.55 bn (actual + planned)

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Towering Telecom
A BRIGHT FUTURE
➔ India is expected to lead in the growth of smartphone
adoption globally with an estimated net addition of 350 mn
by 2020
➔ New National Telecom Policy 2018 has envisaged attracting
investments worth US$ 100 billion in the sector by 2022

➔ The National Digital Communications Policy 2018 aims to

attract US$ 100 billion worth of investments and generate 4
million jobs in the sector by 2022

➔ Internet subscribers expected to double by 2021 to 829

million and overall IP traffic is expected to grow 4-fold at a
CAGR of 30 per cent by 2021

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Booming Healthcare

One of India’s largest sectors - in terms of revenue and employment

Achievements of India’s Healthcare sector

Bright Future
➔ One of the leading destinations for high-end diagnostic services
● Pradhan Mantri Jan Arogya Yojana
➔ India has 150,000 health and wellness centres (PMJAY), government initiative
launched to provide health insurance
➔ A US$ 6 bn medical tourism industry worth US$ 7,124.54 to over 100 million
families every year
➔ US$ 4 bn is current value of the diagnostics industry in India
● Hospital and diagnostic centers
Healthcare industry has grown exponentially attracted Foreign Direct Investment
(FDI) worth US$ 6.09 billion between
➔ 2011: US$73.92 bn April 2000 and March 2019
➔ 2017: US$110 bn
➔ 2019:US$280 bn (projected)

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Dynamic Retail
India is the world’s 5th largest global destination in retail
space

Bright Future
Achievements
➔ Retail currently accounts for over 10% of the ➔ Projected to reach US$ 1.2 tn by 2020
country’s GDP and 8% of total employment
➔ E-commerce industry expected to cross
➔ 2017: India ranked No 1 in Global Retail US$100 bn mark by 2020
Development Index
➔ 100% Foreign Direct Investment (FDI)
➔ April 2000-March 2019: Indian retail trading has in online retail of goods and services
received Foreign Direct Investment (FDI) equity through automatic route
inflows totalling US$ 1.66 billion
➔ 100% FDI under automatic route for
single-brand retail trading

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 Going Up In Global Rankings
The world is recognizing India’s growth narrative...

➔ India jumps 79 spots from 2014-2019 in World Bank Doing

Business ranking
➔ India jumps 14 spots to reach 63rd place in the World Bank 2020 Ease of
Doing Business ranking
➔ Doing Business 2020 listed India among the 10 economies that improved
the most in EoDB score
➔ Indian economy’s latest global advancement follows a jump of 23 positions
in EoDB 2019 ranking
➔ India crossed 79 positions over six years in the EoDB ranking - a record feat
for a major economy
➔ The progress has been driven by Indian Government's policy and regulatory
initiatives since 2014
➔ World Bank’s Doing Business report studies 190 economies across 12
business regulatory areas

“Prime Minister Narendra Modi’s “Make in India” campaign focused on attracting

foreign investment, boosting the private sector—manufacturing in particular—and
enhancing the country’s overall competitiveness.” World Bank Doing Business 2020
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Going Up In Global Rankings

India continues to be South Asia’s top ranked economy

➔ India makes the top 10 on the EoDB performance list for the
third consecutive year
➔ Top performance indicates that business regulatory reform is
a multi-year process
“Given the size of India’s economy,
➔ India carried out four reforms related to -
◆ Starting a business these reform efforts are particularly
◆ Dealing with construction permits commendable…India adopted the
◆ Trading across borders Doing Business indicators as a core
◆ Resolving insolvency component of their reform strategies.”
➔ Indian microfinance sector saw 50% lower default rates, higher
- World Bank Doing Business 2020
operational efficiencies
➔ India continues to be South Asia’s top ranked economy,
drawing strong FDI interest

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Going Up In Global Rankings
Other World Rankings

➔ 2018: 5th largest global manufacturer, India was ranked 30th on the
World Economic Forum’s Future of Production Report 2018

➔ Between 2005-2016: No.1 recipient of greenfield foreign direct

investment among the Commonwealth block of 53 countries

➔ Moody’s Rating 2017 -- India’s sovereign bond rating was raised to

Baa2 from Baa3 (outlook: negative).

➔ 2019: India will still be fastest growing major economy in the world
despite weaker growth rate-International Monetary Fund

➔ No.1 attractive emerging market for global partners investment, as per

Emerging Market Private Equity Association (EMPEA) 2018 UN’s WESP
report: Outlook for India remains largely positive, led by robust
consumption, investment and reforms

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Thank You!
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