Swot Analysis of Indian Economy Free Essays

The economy of India is as diverse as it is large, with a number of major sectors including manufacturing industries, agriculture, textiles and handicrafts, and services. Agriculture is a major component of the Indian economy, as over 66% of the Indian population earns its livelihood from this area. However, the service sector is greatly expanding and has started to assume an increasingly important role. We will write a custom essay sample on Swot Analysis of Indian Economy or any similar topic only for you Order Now The fact that the English speaking population in India is growing by the day means that India has become a hub of outsourcing activities for some of the major economies of the world including the United Kingdom and the United States. Outsourcing to India has been primarily in the areas of technical support and customer services. In general, the Indian economy is controlled by the government, and there remains a great disparity between the rich and the poor. Ranked by the exchange rate of the United States Dollar, the Indian economy is the twelfth largest in the world. In Purchasing Power Parity GDP, the figure for India was 1. 5 trillion US Dollars in 2008. The per capita income of India is 4,542 US Dollars in the context of Purchasing Power Parity. This is primarily due to the 1. billion population of India, the second largest in the world after China. In nominal terms, the figure comes down to 1,089 US Dollars, based on 2007 figures. According to the World Bank, India is classed as a low-income economy. Recent trends have seen India exporting the services of a numerous information technology (IT) professionals. IT professionals have been sought for their expertise in software, software engineering and other fin ancial services. This has been possible as a result of the high skill levels of Indian IT professionals. Other areas where India is expected to make progress include manufacturing, construction of ships, pharmaceuticals, aviation, biotechnology, tourism, nanotechnology, retailing and telecommunications. Growth rates in these sectors are expected to increase dramatically. Over the years the Indian government has taken an economic approach that has been influenced, in part, by the Socialist movements. The Indian national government has maintained a high and authoritative level of control over certain areas of the Indian economy like the participation of the private sector, foreign direct investment, and foreign trade. It may be observed that in spite of the tremendous debate about the justification of the privatization of industries traditionally owned by the government, the process of privatization has still continued at a steady pace. One of the major challenges before the Indian economy, or those who are responsible for operating it, is to remove the economic inequalities that are still persistent in India after its independence in 1947. Poverty is still one of the major issues although these levels have dropped significantly in recent years. As per official surveys, it has been observed that in the 2004, almost 27% of the working Indian populace was living below the poverty line. Poverty is a challenge that’s becoming increasingly important in relationship to the alarming rate of new births. This implies that ever more rapid change, or birth control policies like the ‘One Child’ policy in China, are needed to reduce the numbers affected by poverty in the vast Indian economy. How to cite Swot Analysis of Indian Economy, Essay examples Swot Analysis of Indian Economy Free Essays SWOT Analysis of various sectors of Indian Economy. The India economy, which is the 9th largest in the world in terms of nominal GDP, can be broadly classified into three sectors: 1) Primary Sector or Agriculture Sector, which contributes about 15% to the GDP and employs around 57% of the total workforce. 2) Secondary Sector or Industry sector, which contributes about 28% to the DP and employs around 14% of the workforce. We will write a custom essay sample on Swot Analysis of Indian Economy or any similar topic only for you Order Now 3) Tertiary Sector or Service Sector, which contributes the maximum of 57% to the GDP and employs around 29% of the workforce. SWOT analysis of Agriculture Sector: Strengths : – * The favourable Climate and terrain of the Indian sub-continent makes it suitable for producing a variety of crops. * As it employs majority of population, it enjoys a competitive labour force. * The agriculture sector in India is competitive and hence evolving, produces a large variety of crops, and enjoys a well demanded market as Indians prefer fresh farm produce over the processed food items. Weaknesses:- * As the majority of workforce is uneducated, they are not able to make the most out of the government policies. Moreover, though the government spends enough over the agricultural reforms, but due to the low level of execution on their part, it does not produce the desired results. * Due to the lack of proper storage facilities and road connectivity of the farms with the respective market, around 60% of the fresh farm produce like vegetables, fruits etc get wasted. * Since only 40% of the land under cultivation gets irrigated through canals, tube wells etc. , the farmers depend heavily upon the annual monsoons. Opportunities:- A growing population, availability of modern agricultural techniques, easy availability of banking finance, variety of pest resistance crops, coming up of retail chains and various government schemes and policies, would make both the demand and the production go up. * Rise in demand of pulses and grains in the Asian economies, and the production of fuels like ethanol from grains, provide more market opportunities. Threats:- * More and more of the agricultural land is bei ng taken up to meet with the demands of the housing and industrial sector, thereby reducing land under cultivation. With the increase in the purchasing power of the Indians, the packaged food industry is gaining importance in the Indian market, especially in the cities and among the youth. * Some of the government policies like MGNREGA, is diverting the farm labour to other employment avenues, which could affect the agriculture adversely as it depends heavily on manual labour. * Stiff competition from the international markets, if India opens up the trade barriers in the agriculture sector. SWOT analysis of Industrial Sector: Strengths:- With over half a billion population in the age group of 25-60 years, the industrial sector enjoys a competitive labour market. * Availability of natural resources, skilled and cheap manpower, liberal national policies provide the environment for industries to thrive. Weaknesses:- * Due to India being a democratic country and a mixed economy, the ind ustry has to adhere too many of the protectionist policies of the government, which affects the industry adversely. * The complex labour laws and other political barriers, prevents the industries to work at the best of their efficiency, thus effecting productivity. Opportunities:- * With the rise in the incomes of the Indians, especially the Indian middle class, promises a lucrative domestic market for all the industries. * With the slowdown of the European American economies, Indian companies should towards the African countries like Ghana, Kenya etc. which are growing at a rate of 7-8%. Threats:- * Stiff competition from developing economies like China, Bangladesh, Indonesia because of lower cost of production. * Delay in policy decisions by Indian policy makers, corruption charges and scandals, hindering the ease to do business. Protectionist policies adopted by various European countries and America to safeguard their own interests. SWOT analysis of Service Sector: Strengths:- * With 64% of the Indian population being educated, the service industry has a large talent poll to work with. * Due to large and skilled work force, the labour market becomes competitive, providing cheap labour. * The Robust Banking and Financial system and regulati ons, provide stability not only to banking sector but also to the entire economy. Weaknesses:- Too much dependence on America and European economies for business. * The Indigenous base of the IT industry is not sufficiently developed to sustain software export. Opportunities:- * With the Increased computerization in various public and government organization, the Indian IT industry has ready-made domestic market. Threats:- * Stiff competition from developing economies like China, Bangladesh, Indonesia because of lower labour. * Due to the economic slowdown, countries like America are adopting policies to prohibit outsourcing, which will affect the IT industry. How to cite Swot Analysis of Indian Economy, Papers