About Indian Economy

1. 1
OVERVIEW OF INDIAN
ECONOMY
&
OVERVIEW OF GREECE
ECONOMY
By :
Members Enrolment
numbers
Abhijeet Roy 010111118
Nilanka Ghosh 010111146
Paromita Chatterjee 010111030
Sazid Mohammed 010111122
Sweta Singh 010111063

2. 2
HISTORICAL BACKGROUND OF INDIAN ECONOMY
The British came to India in the year in the year 1600 as traders of the East India Company.
During the British rule in India, Government Policy towards Industry and business was indifferent.
The first century of British rule saw the decline of nearly all indigenous industries for many reasons
– technological, economic and political. The British did not become a ruling power in India until the
second half of the 18th century till when it was as trading concern. Modern industrial enterprises in
India developed only after 1850. Its earliest manifestations came on the wake of the construction of
railways, which made it essential to have modern workshops for repair and maintenance of the
rolling stock. The development of railways ended the isolation of the villages, made the world
market available to the Indian producer, facilitated both foreign and domestic trade, and created the
necessary condition for the growth of Large -scale industry.
The outbreak of the First World War brought an end to the policy of hostility between British Bengal
Chamber of commerce and the government and forced on the Government a more progressive policy that
included selective encouragement of some industries and protective tariff in order to meet war demands. This
led to the appointment of Indian Industrial commission in 1916 to examine and report the possibilities of
industrial development in India and subunit recommendation for policy for industrial growth. The commission
presented its report in 1918. Its proposals were based upon the fundamental principles that in the future
Government must play and active part in the industrial development of the country. It proposed improved
departmental organization for the encouragement and control of industries. Second suggestions were made to
improve technical training and education and to improve the conditions in factories and industrial center.
Third, there were proposals for the reorganization of the scientific staff of the industrial developments. Fourth,
recommendations were made for technical and financial aid to industries, encouragement of industrial co-
operatives, and provisions of improved transport and freight facilities.
The Second World War was major watershed in the development of Government – business relations
in India. As India became the main supply base of the allied War efforts I the Far Eastern fronts, its industrial
development received a tremendous boost from the substantial orders for logically manufactured goods and
through setting up of a large number of new industrial units. During the two brief wars that intervened
between the end of the war (1945) and independence (1947), Government efforts were mostly directed at
dealing with shortages that developed in large numbers of items both consumer goods and essential war
materials. In almost all the industries, for example cotton, textile, cement, steel sugar and paper, production
showed a steep downward trend caused by the fall in demand, overworking of the plants during the war, non-
availably of capital requirement, shortage of many materials, general unrest in the country and transport and
distribution bottlenecks. Government efforts were mainly directed at price and distribution controls through
emergency powers in respect of a whole range of articles like cotton, textile, woollens, and paper, coal, steel,
mica, petroleum and petroleum products.
Pandit Jawaharlal Nehru laid the foundation of modern India. His vision and determination have left a
lasting impression on every facet of national endeavour since independence. The goals and objective set out
for the nation by Pandit Nehru on the eve of independence were as follows:
1. Rapid agricultural and industrial development of the country
2. Rapid expansion of opportunities for gainful employment
3. Progressive reduction of social and economic disparities
4. Removal of poverty and attainment of self-reliance

3. 3
The emergence of India as an independent nation of August 15, 1947, was the beginning of the new
glorious era in the history of our country. Initial Government efforts were directed towards improving the
climate of industrial relations. On April and, 1948, the Parliament adopted an Industrial Policy Resolution
laying down the broad objectives of the government policy in the field of industrial development and
demarcating the respective shapers for public and private sector. The government also took steps 6to clarify its
policy toward foreign capital in a policy statement made by the Prime Minister on April 6, 1949. Since 1950-
51, India has passed through ten five-year plans and is now in the Eleventh Five-year plan. The financial and
the balance of payment crises that the nation faced from the onset of the 1990s compelled the acceptance of
deregulation, reduced role for public sector, making the public sector efficient and surplus generating, and
much reliance in general on the private sector for industrial and infrastructure development.
Industrial Policies
Industrial Policy means rules, regulations, principles, policies and procedures laid down by
governmentfor regulating, developing and controlling industrial undertakings in the country. It
prescribes therespective roles of the public, private, joint and co-operative sectors for the
development of industries.It also indicates the role of the large, medium and small-scale sector. It
incorporates fiscal and monetarypolicies, tariff policy, labour policy, and the Government attitude
towards foreign capital and the role tobe played by Multinational corporations in the development of
the industrial sector. Afterindependence, the Government of India had formulated policies for
industrial growth and development.For regulating these industrial policies, adequate measures were
also adopted by way of industriallicensing policies. These policies have substantial regulated the
business environment in the country.
Objectives of Industrial Policies
Industrial policy statements have been announced from 1948 onwards. A number of objectives
havebeen projected by the Government of India while making industrial policy declarations. Some of
the
Important objectives of the Industrial policies were as follows:
• Achieving a socialistic pattern of society
• Preventing undue concentration of economic power
• Achieving industrial development
• Achieving economic growth
• Reducing disparities in regional development
• Developing heavy and capital goods industry
• Providing opportunities for gainful employment
• Expanding the public sector for achieving socialism
• Achieving a self-sustained economy
• Alleviating poverty
• Protecting and developing a healthy small sector
• Building up large and growing co-operative sector
• Updating technology and modernization of industry

4. 4
• Liberalization and Globalization of economy
Industrial Policy Resolutions
• Following are the important Industrial Policy Resolutions, post independence:
• Industrial Policy Resolution, 1948
• Industrial Policy Resolution, 1956
• New Industrial Policy Resolution, 1991
Details of each Five Year Plan are as follows:
First Five Year Plan (1951 – 56)
Community Development Program was launched in 1952. This plan emphasized on
agriculture, price stability, power & transport. It was more than a success, because of good harvests
in the last two years.
The main objectives of this plan were:
Community and agriculture development
Energy and irrigation
Communications and transport
Industry
Land rehabilitation
Social services
The target of GDP growth in the first five year plan of India was 2.1% per year and the actual growth
of GDP that was achieved had been 3.6% per year. This shows the extent to which the first five year
plan in India had been successful. During the period of India first five year plan, many projects
related to irrigation had been started, such as the Mettur Dam, Bhakra Dam, and Hirakud Dam.
In the first five year plan of India, provisions have been made for the rehabilitation of agricultural
workers who were landless. Apart from that financial allocation was also made for conservation of
soil, experiments, and training in co-operative organizations. Increased provisions have also been
made for the improvement of roads, civil aviation, railways, telegraphs, and posts. For the
development of the basic industry which includes the manufacture of fertilizers and electrical
equipment, provisions have been made in the Indian first five year plan. Emphasis has also been
given to small scale and village industries in the Indian plan of first five years. First five year plan
in India had improved the living condition of the people of the country and is of historical
importance.

5. 5
Second Five Year Plan (1956 – 61)
Its objective was rapid industrialization. Advocated huge imports which led to emptying of
funds leading to foreign loans. It shifted basic emphasis from agriculture to industry far too soon.
During this plan, price level increased by 30%, against a decline of 13% during the First Plan.
The various tasks of the second five year plan in India are:
To increase by 25% the national income
To make the country more industrialized
To increase employment opportunities so that every citizen gets a job
In India, the second five year plan focused on industry - more specifically on the heavy industry.
The domestic production of industrial goods in the public sector was encouraged by the second five
year plan in India.
Mining and industry
Community and agriculture development
Power and irrigation
Social services
Communications and transport
Miscellaneous
During the second five year plan India, 5 steel plants in Jamshedpur, Durgapur, and Bhilai
had been established, apart from a hydro-electric power project which was also undertaken and
implemented. The production of coal increased during this period. Also, more railway lines were
added in the north-east part of the country, during the Indian second five year plan. Land reform
measures have been taken during the period of the second five year plan India, in order to remove
the socio-economic constraints of the rural population.The second five year plan India has, to a
large extent, improved the living standards of the people.
Third Five Year Plan (1961 – 66)
At its conception time, it was felt that Indian economy has entered a take-off stage.
Therefore, its aim was to make India a „self-reliant‟ and „self-generating‟ economy. Also, it was
realized from the experience of first two plans that agriculture should be given the top priority to
suffice the requirement of export and industry.Complete failure due to unforeseen misfortunes, viz.
Chinese aggression (1962), Indo-Pak war (1965), and severest drought in 100 years (1965-66).
Three Annual Plans (1966-69) Plan holiday for 3years. The prevailing crisis in agriculture and
serious food shortage necessitated the emphasis on agriculture during the Annual Plans.
During these plans a whole new agricultural strategy involving wide-spread distribution of High-

6. 6
Yielding Varieties of seeds, the extensive use of fertilizers, exploitation of irrigation potential and
soil conservation was put into action to tide-over the crisis in agricultural production.
During the Annual Plans, the economy basically absorbed the shocks given during the Third Plan,
making way for a planned growth.
The various tasks of the third five year plan India are:
To increase the national income by 5% per year
To increase the production of agriculture so that the nation is self sufficient in food grains
To provide employment opportunities for every citizen of the country
To establish equality among all the people of the country
While formulating the third plan, it was realized that agriculture production was the
destabilizing factor in economic growth. Hence agriculture was given due importance. Also
allotment for power sector was increased to 14.6% of the total disbursement.
Emphasis was on becoming self reliant in agriculture and industry. The objective of import
substitution was seen as sacrosanct. In order to prevent monopolies and to promote economic
developments in backward areas, unfeasible manufacturing units were augmented with
subsidies. The plan aimed to increase national income by 30% and agriculture production by
30%.
The wars with China in 1962 and Pakistan 1965 and bad monsoon in almost all the years,
meant the actual performance was way of the target.
Fourth Five Year Plan (1969 – 74)
Main emphasis on agriculture‟s growth rate so that a chain reaction can start. Fared well in
the first two years with record production, last three years failure because of poor monsoon. Had to
tackle the influx of Bangladeshi refugees before and after 1971 Indo-Pak war.
At the time of initiating the fourth plan it was realized that GDP growth and rapid growth of
capital accumulation alone would not help improve standard of living or to become
economically self-reliant. Importance was given to providing benefits to the marginalized
section of the society through employment and education.
Disbursement to agricultural sector was increased to 23.3% .Family planning programmed
was given a big stimulus.
The achievements of the fourth plan were below targets. Agriculture growth was just at 2.8%
and green revolution did not perform as expected. Industry too grew at 3.9%.
Fifth Five Year Plan (1974-1979)
The Fifth Five Year Plan India was chalked out for the period spanning 1974 to1979 with the
objectives of increasing the employment level, reducing poverty, and attaining self-reliance.

7. 7
At the onset of the Fifth Five Year Plan India in the 1970s, the international economy was in
a turmoil, which had a great impact on the economy of both, developed and developing countries of
the world. The main changes were perceived in sectors such as food, oil, and fertilizers where prices
sky-rocketed. As a result of this, attaining self-reliance in food and energy became a top priority.
During this period, the Indian economy was affected by several inflationary pressures. Food grain
production was above 118 million tons due to the improvement of infrastructural facilities like the
functioning of the power plants and the rise in the supply of coal, steel, and fertilizers. Regarding the
oil, credibility of Bombay High had shot up the commercial production of oil in India. In 1974-75,
Indian exports crossed 18%, and the large earnings from these exports have further increased
theIndian foreign exchange reserves.
The Fifth Five Year Plan India was designed with emphasis on certain objectives, enlisted as
under:
• To reduce social, regional, and economic disparities for developmental planning
• To enhance agricultural productivity
• To initiate land reforms
• To check rural and urban unemployment
• To emphasize on household industries like carpet-weaving, handlooms, sericulture, and
handicrafts to encourage self-employment through a well-integrated local planning
• To encourage import substitution in areas like industrial machinery, chemicals, paper, iron
and steel and non-ferrous metals
• To capture the markets with location advantages
• To initiate appropriate use of fiscal, credit and production support policies in the cottage
industry sector
• To develop labour intensive technological improvements Outlay: A total outlay of Rs.
53,410 crore was proposed for the Fifth Plan.
Sixth Five Year Plan (1980-1985)
The Sixth Five Year Plan India was undertaken for the period between 1980 to1985, with the
main aim of attaining objectives like speedy industrialization, rise in the employment level, poverty
reduction, and acquisition of technological self-reliance.
At the onset of the Sixth Five Year Plan India, Rajiv Gandhi, the then prime minister
prioritized speedy industrial development, with special emphasis on the information technology
sector. From the Fifth Five Year Plan, the nation had been able to achieve self sufficiency in food.
Moreover, the industrial sector was also diversified and science and technology also made a
significant advance. One of the major hindrances in the way of further development in this period
was the boom in the Indian population. However, several successful programs on improvement of

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public health and epidemic control were also undertaken to reduce infant mortality and increase life
expectancy. Significant investments were made by the government in the Indian healthcare sector.
The objectives of the Sixth Five Year Plan India were mainly focused on increasing industrialization
and reducing long-standing problems such as poverty and unemployment. Some of the highlights and
predominant aims of the Sixth Five Year Plan India are enumerated as under:
• To increase the growth rate of the economy
• To concentrate on the promotion of efficient use of resources
• To improve productivity level
• To initiate modernization for achieving economic and technological self-reliance
• To control poverty and unemployment
• To develop indigenous energy sources and efficient energy usage
• To promote improved quality of life of the citizens
• To introduce Minimum Needs Program for the poor and needy with an emphasis to reduce the
discrepancies in income and wealth accumulation
• To initiate Family Planning Programs in order to check the growing population trends
• To protect and improve ecological and environmental assets
• To promote the education at all levels
When Rajiv Gandhi was elected as the prime minister, the young prime minister aimed for
rapid industrial development, especially in the area of information technology. Progress was slow,
however, partly because of caution on the part of labour and communist leaders.
The Indian national highway system was introduced for the first time and many roads were widened
to accommodate the increasing traffic. Tourism also expanded.
The sixth plan also marked the beginning of economic liberalization. Price controls were eliminated
and ration shops were closed. This led to an increase in food prices and an increased cost of living.
Family planning also was expanded in order to prevent overpopulation. In contrast to China's
harshly-enforced one-child policy, Indian policy did not rely on the threat of force. More prosperous
areas of India adopted family planning more rapidly than less prosperous areas, which continued to
have a high birth rate.
Outlay: The proposed outlay for the Sixth Plan totalled Rs.1, 58,710 crore.
Seventh Five Year Plan (1985-1989)

9. 9
The Seventh Five Year Plan India was for the duration between 1985 and 1989 under the approval of
the National Development Council in India. The main objectives of the 7th five year plans were to
establish growth in the areas of increasing economic productivity, production of food grains, and
generating employment opportunities. As an outcome of the sixth five year plan, there had been
steady growth in agriculture, control on rate of Inflation, and favourable balance of payments which
had provided a strong base for the seventh five Year plan to build on the need for further economic
growth. The 7th Plan had strived towards socialism and energy production at large. The thrust areas
of the 7th Five year plan have been enlisted below:
• Social Justice
• Removal of oppression of the week
• Using modern technology
• Agricultural development
• Anti-poverty programs
• Full supply of food, clothing, and shelter
• Increasing productivity of small and large scale farmers
• Making India an Independent Economy
Based on a 15-year period of striving towards steady growth, the 7th Plan was focused on achieving
the pre-requisites of self-sustaining growth by the year 2000. The Plan expected a growth in labour
force of 39 million people and employment was expected to grow at the rate of 4 percent per year.
Anti-poverty program:
Special emphasis was given to the most vulnerable classes of people in the society viz., women,
children, schedule tribes, and schedule castes. The poverty ratio was expected to decline to 26
percent in 1989-90.
Agriculture:
The government undertook to increase productivity of oilseeds, fruits, vegetables, pulses, cereals,
fish, egg, meat, and milk.
Welfare:
Improved facilities for education to girls, family welfare, healthcare, reduction in infant mortality
were undertaken by the government as part of the 7th five year plan.
Communications:

10. 10
Emergence of informatics, telematics, and hooking up of telecommunications with computers were
important features of the 7th five year plan in terms of development in Communications.
Transport:
More stress was laid on increasing supplementary modes of transport such as inland waterways,
product pipelines, civil aviation, coastal shipping. The 7th Plan expected an increase in accessibility
to about 60 percent of the villages in India.
Some of the expected outcomes of the Seventh Five Year Plan India are given below:
• Balance of Payments (estimates): Export - Rs. 33 thousand crore, Imports - (-) Rs.54 thousand
crore, Trade Balance - (-) Rs.21 thousand crore
• Merchandise exports (estimates): Rs. 60,653 crore
• Merchandise imports (estimates): Rs. 95,437 crore
• Projections for Balance of Payments: Export - Rs.60.7 thousand crore, Imports - (-) 95.4 thousand
crore, Trade Balance- (-) Rs.34.7 thousand crore
Seventh Five Year Plan India strove to bring about a self-sustained economy in the country with
valuable contributions from voluntary agencies and the general populace.
Eighth Five Year Plan (1992-1997)
Eighth Five Year Plan India runs through the period from 1992 to1997 with the main aim of
attaining objectives like modernization of the industrial sector, rise in the employment level, poverty
reduction, and self-reliance on domestic resources.
Just before the formulation of the Eighth Five Year Plan India, there was great political instability in
India which hindered the implementation of any five years plan for the following two years after the
Seventh Five Year Plan. This period is characterized by extreme FOREX reserve crisis and
introduction of liberalization and privatization in Indian economy. To invite FDI in Indian industrial
sector and to follow free market reforms were the only possible ways to revive the country from
foreign debt.
Objectives of the Eighth Five Year Plan India:
The main objectives of the Eighth Five Year Plan India are:
• To prioritize the specific sectors which requires immediate investment to generate full scale employment

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• To promote social welfare measures like improved healthcare, sanitation, communication and provision for
extensive education facilities at all levels
• To check the increasing population growth by creating mass awareness programs
• To encourage growth and diversification of agriculture
• To achieve self-reliance in food and produce surpluses for increase in exports
• To strengthen the infrastructural facilities like energy, power, irrigation
• To increase the technical capacities for developed science and technology
• To modernize Indian economy and build up a competitive efficiency in order to participate in the global
developments
• To place greater emphasis on role of private initiative in the development of the industrial sector
• To involve the public sector to focus on only strategic, high-tech and essential infrastructural developments
• To create opportunities for the general people to get involved in various developmental activities by building
and strengthening mass institutions
Energy was given priority with 26.6% of the outlay. An average annual growth rate of 6.7%against
the target 5.6% was achieved.
Ninth Five Year Plan (1997-2002)
Ninth Five Year Plan India runs through the period from 1997 to 2002 with the main aim of attaining
objectives like speedy industrialization, human development, full-scale employment, poverty
reduction, and self-reliance on domestic resources.
Ninth Five Year Plan was formulated amidst the backdrop of India's Golden jubilee of Independence.
The main objectives of the Ninth Five Year Plan of India are:
To prioritize agricultural sector and emphasize on the rural development
To generate adequate employment opportunities and promote poverty reduction
To stabilize the prices in order to accelerate the growth rate of the economy
To ensure food and nutritional security.
To provide for the basic infrastructural facilities like education for all, safe drinking water,
primary health care, transport, energy
To check the growing population increase
To encourage social issues like women empowerment, conservation of certain benefits for the
Special Groups of the society
To create a liberal market for increase in private investments
During the Ninth Plan period, the growth rate was 5.35 per cent, a percentage point lower than the
target GDP growth of 6.5 per cent
This plan was developed in the context of four important dimensions: Quality of life, generation of
productive employment, regional balance and self-reliance.

12. 12
Achievements of the Ninth Plan in India
Growth rate of GDP during the plan was 5.4% per annum as against the target of 6.5%.
Agriculture grew by 2.1% as against the target of 4.2% p.a.
Industrial growth was 4.5% as against the target of 3% p.a.
Exports grew by 7.4% (target was 14.55%) and imports grew by 6.6% (target was 12.2%
p.a.).
Services grew at the rate of 7.8% per annum.
Failures of the Ninth Plan in India
The average rate of growth of industrials production during ninth plan (1997-98 to 2001-02)
work out to only 5.0 per cent per annum which was by all means, a un satisfactory
performance.
The performance of the capital goods sector and the basic good sector was particularly
discouraging during the period of the Ninth Plan.
From 9.4 per cent per annum in the pre reform decade (1980-81 to 1991-92) the rate of
growth of the capital goods sector fell to only 4.7 per cent per annum during the Ninth Plan
Over the same period, the annual rate of growth of the basic goods sector fell from 7.4 per
cent to 4.1 per cent.
The performance of the intermediate goods sector and the consumer goods sector particularly
the durable consumer goods sector was relatively better.
Services grew at the rate of 7.8% per annum.
Tenth Five Year Plan (2002 - 2007)
The major objectives were as under:
To attain a growth rate of 8%.
Reduction of poverty ratio to 20% by 2007 and to 1.0% by 2012.
Providing gainful high quality employment to the addition to the labour force over the Tenth
Plan period.
Universal access to primary education by 2007.
Reduction in gender gaps in literacy and wage rates by at least 50% by 2007.
Reduction in decadal rate of population growth between 2001 and 2011 to 16.2%.
Reduction of poverty ratio by 5 percentage points by 2007
20 point program was introduced.
Increase in literacy rate to 72% within the plan period and to 80% by 2012.
Providing gainful and high-quality employment at least to the addition to the labour force.
Reduction of Infant Mortality Rate (IMR) to 45 per 1000 live births by 2007 and to 28 by
2012.
Reduction of Maternal Mortality Rate (MMR) to 20 per 1000 live births by 2007 and to 10 by
2012.
Increase in forest and tree cover to 25% by 2007 and 33% by 2012.
All villages to have sustained access to potable drinking water by 2012.
Cleaning of all major polluted rivers by 2007 and other notified stretches by 2012.

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The plans have traditionally focused on setting national targets, but it has been found that
there is a variation in the performance of different States. The Tenth Plan focused on ways
and means of correcting the regional imbalance.
Currently, eight States, with poor health and demographic indices, constitute 44.7% of India's
population. Special efforts were made during the Tenth Plan to enable these States to fully
achieve their potential.
The plan laid great emphasis on agriculture since growth in this sector is likely to lead to the
widest dissemination of benefits, especially to the rural poor including agricultural labour.
The growth strategy of the Tenth Plan seeked to ensure the rapid growth of those sectors which are
most likely to create high quality employment opportunities. These included such sectors as
construction, real estate, and housing, transport, Small Scale Industries, modern retailing,
entertainment, IT-enabled services, etc.
Target growth: 8.1% Growth achieved: 7.7%
Achievements of Tenth Plan
Thenation registered a growth rate of 12.02 % at the beginning of the year and 8.89%
during the 4th
year (2010-11) of 11th
plan period.
Regarding sectorial growth rates Agricultural sector unlike during the 10th
plan period
showed certain signs of recovery and posted an average growth of 7.16% during four year
period.
The industries sector during this period grew at 6.82%.
The services sector continuing its predominance posted a growth rate of 8.84% during the
11th
plan period.
The food grain productions has recorded 204.21 lakh tonnes during the year 2008-09 and
slipped to 156 lakh tonnes during 2009-10 due to seasonal condition and 189.78 lakh
tonnes during 2010-11.
4. Education: 53% of them are covered under Bank to make education more meaningful
and linkage effective, the State Government has been Social Harmony implementing
several schemes of its own and from the year 2008-09, applications and those sponsored
by the Government of India. Sanction of scholarships to S.C, S.T and B.C133.64 lakh
children have been enrolled in students were made ONLINE to ensure that different
levels with 53.40% in the Primary scholarships reach the students by the 1st offstage.
Government is taking all necessary every month and also to ensure transparency measures
to retain children in schools. By keeping all the information in the public during 2009-10,
the dropout rates have fallen domain. To 15.80% at Primary level and 53.36% at the
Apart from the above, other educational and Secondary level. Economic development
programmes are also an amount of Rs. 3530.21 crores has been being implemented to SC,
ST, BC and spent towards General Education in the State Minorities. During the 4-year
period of the 11th Plan.

14. 14
Failures of 10th
five year plan
The share of agriculture in GDP has consistently declined over the years and was merely 18.5
per cent in 2006-07. This sector continues to be the source of livelihood for more than 50
crore people and provides employment to 52 per cent of the workforce. However, the
performance of the agricultural sector has been highly unsatisfactory. The rate of growth of
this sector was merely 2.5 percent per annum in the ninth and tenth five year plans. This
indicates a situation of almost stagnation in the agricultural sector of the economy. As a result
the condition of the rural poor has further deteriorated. In other words the so called high rate
of growth of almost 8 per cent annum has failed to improve the lot of the poor people.
The unemployment problem: The unemployment rate has risen from 7.31 per cent in 1999-
2000 to 8.28 percent in 2004-05. The number of unemployment rose to as high as 3.47 crore
in 2004-05 from 2.03 crore in 1993-94. Increasing unemployment is a cause of concern.
Unrealistic power and energy target: The tenth plan targeted capacity addition of 41,110
MW in the power sector. However the actual achievement at 21,080 MW is just about half
the target. It is estimated that the average energy shortage in the country is 10 per cent and
the peak hour shortage is over 13 per cent. In some states the peak hour shortage is as high as
25 per cent.
Eleventh Five Year Plan (2007-2012)
The eleventh plan has the following objectives:
1. Income & Poverty
Accelerate GDP growth from 8% to 10% and then maintain at 10% in the 12th Plan in
order to double per capita income by 2016–17
Increase agricultural GDP growth rate to 4% per year to ensure a broader spread of
benefits
Create 70 million new work opportunities.
Reduce educated unemployment to below 5%.
Raise real wage rate of unskilled workers by 20 percent.
Reduce the headcount ratio of consumption poverty by 10 percentage points.
2. Education
Reduce dropout rates of children from elementary school from 52.2% in 2003–04 to 20%
by 2011–12

15. 15
Develop minimum standards of educational attainment in elementary school, and by
regular testing monitor effectiveness of education to ensure quality
Increase literacy rate for persons of age 7 years or above to 85%
Lower gender gap in literacy to 10 percentage point
Increase the percentage of each cohort going to higher education from the present 10% to
15% by the end of the plan.
3. Health
Reduce infant mortality rate to 28 and maternal mortality ratio to 1 per 1000 live births
Reduce Total Fertility Rate to 2.1
Provide clean drinking water for all by 2009 and ensure that there are no slip-backs
Reduce malnutrition among children of age group 0–3 to half its present level
Reduce anaemia among women and girls by 50% by the end of the plan
4. Women and Children
Raise the sex ratio for age group 0–6 to 935 by 2011–12 and to 950 by 2016–17
Ensure that at least 33 percent of the direct and indirect beneficiaries of all government
schemes are women and girl children
Ensure that all children enjoy a safe childhood, without any compulsion to work
5. Infrastructure
Ensure electricity connection to all villages and BPL households by 2009 and round-the-
clock power.
Ensure all-weather road connection to all habitation with population 1000 and above
(500 in hilly and tribal areas) by 2009, and ensure coverage of all significant habitation
by 2015
Connect every village by telephone by November 2007 and provide broadband
connectivity to all villages by 2012
Provide homestead sites to all by 2012 and step up the pace of house construction for
rural poor to cover all the poor by 2016–17
6. Environment

16. 16
Increase forest and tree cover by 5 percentage points.
Attain WHO standards of air quality in all major cities by 2011–12.
Treat all urban waste water by 2011–12 to clean river waters.
Increase energy efficiency by 20%
Target growth:8.33% Growth achieved:7.9%
Twelfth five-year plan (2012-2017
The aim of the 12th
five year plan is to renew Indian economy and use the funds from government in
improving the facilities of education, sanitation and health. This plan has seen a three-fold increase
in the budget constraints when compared to that of the 11th five-year plan. The plan would infuse a
huge fund of 47.7 lakh crore rupees and this will help to accomplish the economic growth to an
average level of 8.2 percent.
12th five-year plan is guided by the policy guidelines and principles to revive the following Indian
economy, which registered a growth rate of meager 5.5 percent in the first quarter of the financial
year 2012-13.
The plan aims towards the betterment of the infrastructural projects of the nation avoiding all types
of bottlenecks. The document presented by the planning commission is aimed to attract private
investments of up to US$1 trillion in the infrastructural growth in the 12th five-year plan, which will
also ensure a reduction in subsidy burden of the government to 1.5 percent from 2 percent of the
GDP (gross domestic product) & the UID (Unique Identification Number) will act as a platform for
cash transfer of the subsidies in the plan.
The plan aims towards achieving a growth of 4 percent in agriculture and to reduce poverty by 10
percentage points, by 2017.
Indian economy at present
The Indian economy is the world's tenth-largest by nominal GDP and third-largest by purchasing
power parity (PPP) it is becoming one of the fastest-growing major economies in the world.
According to CRISIL Research Consumption the GDP of India is growing at a higher rate of 6.7 per
cent in 2013-14 in comparison to 5.5 per cent estimated for the current fiscal due to a revival in
consumption.India is expected to be the second largest manufacturing country in the next five years,
followed by Brazil as the third ranked country it is also been adjourned the fifth best country in the
world for dynamic growing businesses, as per the Grant Thornton Global Dynamism Index. The
index gives a reflection of how suitable an environment the country offers for dynamic businesses.
Moreover India is the 5th
largest exporter and importer of commercial services preceded by European
countries and US. It is also the 4th
largest foreign exchange reserve holder in the world after China,
Japan and Russia.

17. 17
The Fiscal Policy
Revised Budget
Targets for
Estimates
2012 – 13
Budget
Estimates
2012-13
Targets for
2014-15 2015-16
Effective Revenue
Deficit
2.7
1.8 0.9 0.0
Revenue Deficit 3.9 3.3 2.7 2.0
Fiscal Deficit 5.2 4.8 4.2 3.6
Gross Tax Revenue 10.4 10.9 11.2 11.5
Total outstanding
liabilities
at the end of the year
45.9 45.7 44.3 42.3
Fiscal Outlook for 2013-14 to 2015-16
Government undertook path of fiscal consolidation with mid-year course correction in 2012-
13. Fiscal policy 2013-14 has been designed to meet the macro-economic challenges faced by India
in an uncertain international economic situation. By bringing back the focus on fiscal consolidation
process, government has undertaken measures to reduce the fiscal deficit from 5.2 percent of GDP in
RE 2012-13 to 4.8 per cent of GDP in BE 2013-14. This reduction in fiscal deficit by 0.4 percentage
point is largely revenue driven. While expenditure is retained at the same level of 14.6 per cent of
GDP in BE 2013-14, increase in tax revenue and non-tax revenue is of the order of 0.4 per cent and
0.2 percent of GDP respectively.
Revenue deficit has been estimated at 3.3 percent of GDP in Budget estimate 2013-14. The
revenue deficit is marginally lower than BE 2012-13 level of 3.4 percent. However, it is substantially
lower than the revised estimate 2012-13 at 3.9 per cent.It is expected that with better expenditure
management the revenue deficit will be reduced to 2.7 per cent and 2.0 per cent in financial year
2014-15 and 2015-16 respectively.
Gross tax revenue is estimated to increase from 10.4 per cent of GDP in RE 2012-13 to 10.9
per cent in BE 2013-14 (reflecting growth of 19.1 per cent over RE 2012-13), which is however still
lower than peak of 11.9 per cent of GDP achieved during 2007-08 At end of 2012-13, a total liability
of the Government is estimated at 45.9 percent of GDP which will reduce to 45.7 per cent by the end
of 2013-14. Continuing the declining trend it is likely to reduce to 44.3 per cent in 2014-15 and 42.3
per cent in 2015-16.

18. 18
At end of 2012-13, a total liability of the Government is estimated at 45.9 per cent of GDP
which will reduce to 45.7 per cent by the end of 2013-14. Continuing the declining trend it is likely
to reduce to 44.3 percent in 2014-15 and 42.3 per cent in 2015-16.
Monetary Measures by RBI (2012-13)
Repo Rate:
The bank rate has been decreased from 8.00% to 7.75% (w.e.f.29/01/2013)
Bank Rate:
The bank rate has been decreased from 9.00% to 8.75% (w.e.f. close of business of 29/01/2013)
Cash Reserve Ratio:
The CRR has been decreased from 4.25% to 4.00% (w.e.f 09/02/2013)
Statutory Liquidity Ratio (SLR):
SLR has been decreased from 24% to 23% (w.e.f. 11/08/2012) (announced on 31/07/2012)
Inflation Rate
In India, the wholesale price index (WPI) is the main measure of inflation.
Wholesale price index is divided into three groups: Primary Articles (20.1% of total weight), Fuel
and Power (14.9%) and Manufactured Products (65%). Food Articles from the Primary Articles
Group account for 14.3% of the total weight. The most important components of the Manufactured
Products Group are Chemicals and Chemical products (12% of the total weight); Basic Metals,
Alloys and Metal Products (10.8%); Machinery and Machine Tools (8.9 %); Textiles (7.3%) and
Transport, Equipment and Parts (5.2%).
The annual rate of inflation, based on monthly WPI, is 6.62% as on January of 2013.
Growth Rate
The growth rate is measured by the GDP (gross domestic product). The present GDP of India is
4.5%
Greece Economy Overview
Greece officially the Hellenic Republic is a country in Southeast Europe. Athens is the
nation's capital and largest city, its metropolitan area also including the municipality of Piraeus.
According to the 2011 census, Greece's population is slightly less than 11 million. It is located at the

19. 19
crossroads of Europe, Asia and Africa and has land borders with Albania, the Republic of Macedonia
and Bulgaria to the north, and Turkey to the northeast.
Greece has been a member of NATO since 1952, joined the European Union in 1981, and
adopted the euro in 2002. An enormous Greek sovereign debt crisis has threatened the overall
stability of the eurozone. Large rescue packages have provided emergency loans from the EU, the
European Central Bank, and the International Monetary Fund in exchange for severe austerity
measures. A caretaker government was formed in November 2011. When elections held in May 2012
failed to produce a government, new elections in June led to formation of a “pro-Euro” coalition led
by the center-right New Democracy party along with the center-left Pan-Hellenic Socialist
Movement and the Democratic Left Party. Greece‟s economy depends heavily on tourism and
services.
Compounding an environment of worsening competitiveness and political volatility in Greece
is the continuing lack of economic freedom. Major fiscal weaknesses exposed and aggravated by the
debt and employment crisis have not been sufficiently addressed as the country enters its fifth
straight year of recession. Double-digit deficits and large increases in borrowing have continued even
while multinational financing packages have been approved to keep the government solvent.
Unemployment, particularly among young people, continues to rise, and adjustments in market
conditions have been stifled or delayed by public unions and other special interests.
As the Greek economy continues to undergo an extended period of economic and political turmoil,
bold and committed policy actions are critically needed to restore fiscal sustainability, enhance
labour market flexibility, and tackle systemic corruption.
The Greek economy was one of the fastest growing in the Eurozone from 2000 to 2007; during this
period it grew at an annual rate of 4.2%, as foreign capital flooded the country. Despite that, the
country continued to record high budget deficits each year.
Financial statistics reveal solid budget surpluses existed in 1960-73 for the Greek general
government, but since then only budget deficits were recorded. In 1974-80 the general government
had an era with moderate and acceptable budget deficits (below 3% of GDP). Unfortunately this was
followed by a long period with very high and unsustainable budget deficits in 1981-2014 (above 3%
of GDP).
According to an editorial published by the Greek conservative newspaper „Kathimerini‟, large public
deficits were indeed one of the features that have marked the Greek social model since the
restoration of democracy in 1974. After the removal of the right-wing military junta, the government
wanted to bring disenfranchised left-leaning portions of the population into the economic
mainstream. In order to do so, successive Greek governments have, among other things, customarily
run large deficits to finance public sector jobs, pensions, and other social benefits.
First bailout loan and austerity measures (May 2010 - June 2011)

20. 20
On 1 May 2010, the Greek government announced a series of austerity measures. The next
day the Eurozone countries and the International Monetary Fund agreed to a three-year €110 billion
loan retaining relatively high interest rates of 5.5%, conditional on the implementation of austerity
measures. Credit rating agencies immediately downgraded Greek governmental bonds to an even
lower junk status. This was followed by an announcement of the ECB on 3 May that it will still
accept as collateral all outstanding and new debt instruments issued or guaranteed by the Greek
government, regardless of the nation's credit rating, in order to maintain banks' liquidity.
The new austerity package was met with great anger by the Greek public, leading to massive
protests, riots and social unrest throughout Greece
Second bailout loan and austerity measures (July 2011 - present)
The EU and IMF provided Greece with a second financial package of 130 billion Euros.
Under the agreement, Greece's private creditors would take more losses. The bailout package hopes
to cut its national debt to 120% of its GDP by 2020.
Some of the austerity measures planned are as follow
TAXATION
Taxes will increase by 2.32bn euros this year, with additional taxes of 3.38bn euros in
2012, 152m euros in 2013 and 699m euros in 2014.
A solidarity levy of between 1% and 5% of income will be levied on households to raise
1.38bn euros.
The tax-free threshold for income tax will be lowered from 12,000 to 8,000 euros.
There will be higher property taxes
VAT rates are to rise: the 19% rate will increase to 23%, 11% becomes 13%, and 5.5%
will increase to 6.5%.
The VAT rate for restaurants and bars will rise to 23% from 13%.
Luxury levies will be introduced on yachts, pools and cars.
Some tax exemptions will be scrapped
Excise taxes on fuel, cigarettes and alcohol will rise by one third.
Special levies on profitable firms, high-value properties and people with high incomes will
be introduced.
PUBLIC SECTOR CUTS
The public sector wage bill will be cut by 770m euros in 2011, 600m euros in 2012, 448m
euros in 2013, 300m euros in 2014 and 71m euros in 2015.

21. 21
Nominal public sector wages will be cut by 15%.
Wages of employees of state-owned enterprises will be cut by 30% and there will be a cap on
wages and bonuses.
All temporary contracts for public sector workers will be terminated.
Only one in 10 civil servants retiring this year will be replaced and only one in 5 in coming
years.
SPENDING CUTS
Defence spending will be cut by 200m euros in 2012 and by 333m euros each year from 2013
to 2015.
Health spending will be cut by 310m euros this year and further 1.81bn euros in 2012-2015,
mainly by lowering regulated prices for drugs.
Public investment will be cut by 850m euros this year.
Subsidies for local government will be reduced.
Education spending will be cut by closing or merging 1,976 schools.
CUTTING BENEFITS
Social security will be cut by 1.09bn euros this year, 1.28bn euros in 2012, 1.03bn euros in
2013, 1.01bn euros in 2014 and 700m euros in 2015.
There will be more means-testing and some benefits will be cut.
The government hopes to collect more social security contributions by cracking down on
evasion and undeclared work.
The statutory retirement age will be raised to 65, 40 years of work will be needed for a full
pension and benefits will be linked more closely to lifetime contributions.
PRIVATISATION
The government aims to raise 50bn euros from privatisations by 2015, including:
Selling stakes this year in the betting monopoly OPAP, the lender Hellenic Postbank, port
operators Piraeus Port and Thessaloniki Port as well as Thessaloniki Water.
It has agreed to sell 10% of Hellenic Telecom to Deutsche Telekom for about 400m euros.
Next year, the government plans to sell stakes in Athens Water, refiner Hellenic Petroleum,
electricity utility PPC, lender ATEbank as well as ports, airports, motorway concessions,
state land and mining rights.
It plans further sales to raise 7bn euros in 2013, 13bn euros in 2014 and 15bn euros in 2015.

22. 22
GREECE AT PRESENT
Population:
o 11.2 million
GDP (PPP):
o $294.3 billion
o -6.9% growth
o -2.2% 5-year compound annual growth
o $26,294 per capita
Unemployment:
o 24.4%
Inflation (CPI):
o 3.1%
FDI Inflow:
o $1.8 billion