India Flashcards
What % of the population are engaged in the private sector?
75%
What % of GDP does the private sector account for?
25%
What causes high degree of rural poverty?
Majority of landholdings are farmed at subsistence level
In 1999 what % of people lived on less than $1 a day?
42%
What has limited rapid expansion in India?
Low level of FDI
What has the transformation of the Indian economy been led by?
Service sector
What does India have a large number of?
Highly qualified professionals who skills are in demand in other countries
What has demand and supply of workers been united by?
Telecommunications and worker migration
In 1999 what was a milestone in India’s economic progress?
Infosys Technologies (a software exporter) became the first Indian company to list on a US stock market
In 1999 what did IT sectors market capitalisation reach?
Exceeded 1,000 billion, highest valuation ever placed on an Indian industry
In 2000 what % of GDP did services account for?
47%
What has the filter down of employment to India been dominated by?
Links with North America and Europe with relatively low level of involvement from Japan and the other dynamic Asian economies
In the decades after 1947 independence what policy did India follow?
Policy of import subsitution which led to the development of a broad industrial base
What is import substitution?
Manufacturing its own products rather than importing from other countries
What did the lack of foreign competition result in?
Contributed to poor product quality and inefficiencies in production.
How were Indian manufactured products viewed?
Viewed as poor quality in the domestic market and for the same reason made little impact abroad
In the early stages of economic reform how could foreign companies enter manufacturing sector?
Through joint ventures meaning that India’s 15,000 joint ventures were formed for regulatory purposes rather than strategic ones
Since 1999 how has foreign investment changed?
100% foreign ownership has been allowed in many industrial sectors
What is India’s most successful joint venture and what did they do?
Hero Honda, which has a 26% stake in the company announced in 1999 that it had secured permission to set up a 100% owned subsidiary
What has become the focal point for the car industry?
Madras
Since 1991 how has the number of car manufacturers in India increased?
Increased from 3 (190,000 vehicles) to 10 (500,000 vehicles) in 2000
What do the western states of Gujarat and Maharastra attract?
Attract about 1/4 of all new investment, both domestic and foreign, into the Indian economy
What did India commission in 1999?
World’s largest integrated oil refinery - 27 million tonnes per anumn
How much revenue did FDI produce in 2000?
$2 billion
By 2005 how does the government hoped to have increased FDI?
$10 billion a year
How have revenues from Indian software exports grown?
Grown from less than $1 billion in 1996 to $4 billion in 2000
By 2008 what % of GDP will software exports account for?
7%
What has India’s IT sector benefitted from?
Filter down of business from the developed world
3 reasons why outsourcing occurs in India
Labour costs are lower
Number of developed countries have significant ICT skills shortages
50 million fluent English speakers in India
In 1999 what did India establish?
Ministry of IT - main task is to increase software and ICT services revenue for the country
Where has emerged as the centres of India’s IT industry?
Bangalore Hyderabad Madras Pune Dehli
What happened to the company Texas Instruments in 2000?
Half of a dozen of its top Indian engineers left the company strike out on their own
What did a recent survey by the National Association of Software and Services companies show?
Demand for IT professionals is expected to rise from 340,000 in 2000 to 800,000 by 2005 - possible manpower shortages
What did the company Cisco pledge to the Indian government?
Pledged $10 million to set up 30 ‘networking academies’ across the country in order to avoid the impacts of a ‘brain drain’
What does NASSCOM estimate?
India will employ 1.1 million people and earn $17 billion from IT enabled services by 2008
What are the 2 sections of India’s back office industry?
Captive operations of large western companies seeking to cut back office costs without outsourcing
Shorter term contracts between western companies and subcontractors in India, often booked by middlemen
What is a worrying effect of national growth?
Increase in the development gap between north and south - known as regional diversity
Where is most investment flowing?
Flowing southwards into a v-shaped region from Gujarat in the west to Andrah Pradesh in the east
What models do the growth of Indian economy follow?
Models of regional development constructed by Gunnar Myrdal 1957 and Albert Hirschman 1958 - explain that in the early stages of economic development the wealth gap between core and peripheral regions widens
