Swot Analysis of Indian Economy

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. 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 being 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 industry 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 regulations, 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.