India - Economic situation and prospects

Report No.1073-IN Economic Situation and Prospects of India March 29, 1976 South Asia Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their offical duties. Its contents nay not otherwise be discbsed without World Bank authorization.  CURRENCY AND OTHER EQUIVALENTS Currency Prior to June 6, 1966 US$1.00 = Rs. 4.7619 Rs. 1.00 = US$0.21 From June 6, 1966 to : US$1.00 = Rs. 7.50 mid-December 1971 Rs. 1.00 = US$0.13333 Mid-December 1971 to US$1.00 = Rs. 7.27927 end June 1972 Rs. 1.00 = US$0.1374 After end-June 1972 : Floating rate Spot rate (December 31, 1975) US$1.00 = Rs.8.937 Rupee trade figures have been converted into dollars by using the prevailing exchange rate up to 1970/71. For subsequent years average IMF conversion rates have been used. These are Rs. 7.444, Rs. 7.706, Rs. 7.791 and Rs. 7.976 per US dollar for the periods 1971/72, 1972/73, 1973/74 and 1974/75. For 1975/76, the average conversion factor for the first half was Rs. 8.385. For the year as a whole the rate of Rs. 8.65 has been used. Weights Unless otherwise specified all weight measures are metric. Years The Indian fiscal year runs from April 1 through March 31. Abbreviations Used n.a. = not available n.s. = not significant (blank) = not applicable = nil  FOR OFFICIAL USE ONLY This report was prepared in New Delhi by members of the World Bank Resident Mission in India and of the India Division at World Bank Headquarters under the guidance of J. Kraske (Resident Mission Chief) and 0. Yenal (Principal Economist). Those contributing from the Resident Mission were: J. Harrison, M. Karcher, P. Naylor, P. Pohland, S. Sengupta and A. Van Nimmen. Those from the India Division were: M. Baird, R. Grawe, C. Taylor, J. Wall and M. Wolf. Y. Satyanarayana assisted in the statistical work. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be discosed without World Bank authorization.   ECONOMIC SITUATION AND PROSPECTS OF INDIA Table of Contents Page No. BASIC DATA MAP SUMMARY OF,CONCLUSIONS . .......................... . . . . .. . i - iii PART I - CURRENT DEVELOPMENTS ............................. 1 A. GENERAL ECONOMIC SCENE 1........... ..... I 1. Supply and Demand 1........... o ............. I 2. Stabilization Policies and Prices .... ....... 3 3. Savings and Investment - Past Trends and Outlook .......................... 00 ............. 0...... 8 4. Balance of Payments ...... .................. 12 B. SECTORAL DEVELOPMENTS .......................... 15 1. Agriculture .... o .................. .... ... 15 2. Industry and Mining ........................ 18 3. Transport .... 6....... ..... 0*.... .......................... 22 4. The Social Sectors ..... .................. 23 PART II MEDIUM-TERM PROSPECTS ....................... . .. 26 A. FOODGRAINS .......... . . .. ........... ................... .... 26 1. Trends in Foodgrain Production: Past and Future . ......................... 26 2. Input-Output Prospects in the Medium Term ... o......o.... . . . . . ........ .... ....o 30 B. ENERGY ...... ... o*..................... o................... 43 1. Power ...... * .............. ... 0. ...... 44 2. Coal .......... . o............. ....... ....o.............. 46 3. Petroleum and Natural Gas ...... ............ 47 C. EXPORTS ....so............ .. 51 1. The Role of Exports ......................*. . 51 2. Past Developments and Problems ...... ....... 51 3. Recent Policy Changes and the Medium- Term Targets .... .... . .... O.. . ................ . . 60 4. Longer-Term Prospects and Policy Issues .... 67 D. AID ............................................ 70 1. Medium-Term Perspectives ............o....... 70 2. Aid Requirements in 1976/77 ......... 00 ..... 75 STATISTICAL APPENDIX (including List of Tables)  I I r  ODDNTRY DATA - INDIA a"IL POPULiTION DENSITY 3,280,483 b1 577.0 million (mid-1973) Per ie2ef arable land SOCIAL INDICATORS Reference Cnontries India Inoeia. Phei.i.i U. K.* ly960 19 170 1970 1970 ON? FSR GAPI USS (ATIAS BASIS) 110 .O /a 90 /a 220 /a 2,600 /a DEOGRAPHIC Crud birth rat (per thousand) 38 f 38 a 48 L 45 ft1 13.9 Crude death rate (per thousand) 13 16 od 19 1/e 12 . 120 f Infent mortality rate (per thoausnd live births) 139 120-140 c d 80 17.5 L Lif. expectaney at birth (years) 41 LI 5 148 58 72 Groes reproduction rate f 2.7 /hi 2.9 3.2 3.3 1.3 Poplatio growth rate 2. 3 2.3 20 30 5 Population growth rate - urban 3h 4 5k 40 5 Age structure (percent) 0-114 41 40 /44 f 43 ft 23.7 ft 15-64 56 57 f 53 f 54 ft 62.7 a 65 and ver 3 3 f 3/c 3 a 13.6 a Age dependency retio f 0.8 0.8 9 0.9 ft 0.6 -oencnri depende-cy ntio & 1.0 1.7 Li 1 5 t 1.5 0 8 Ic Urban population as percent of total 18 /k 20 /ak 18 /1 32 /c.n 78 /a.. Family planning: No. of accaptore romolative (thouse 1,000 5 175 409 No. of users (% of eared wen) 8 LOPIDENT Total laber force (thousands) 189,000 ft 221,000 4fl 40,100 ft 13,200 ft 25,700 oo Percentage employed in agriculture 73 ft 71 /c1 62 L 56 ZL 3 Percentage unemployed . 3Jn 2 2 7f 3.6 /an INOOME DISTRIBUTION Perccnt of national income received by highest 5% 27 ft 25 /ro 25 A.r 15 /r.t Percent of oatioal inore received by highest 20% 52 ft 53 /- . 54 c:r 39 /r Percent of national income received by lowest 20S 4 Li 5 4 7t7 6 i Percent of national incoes received by lowest 40% 14 f 13 .. 12cr 19 DISTERIBUTION OF LAND *RRRHlI? S owned by top iOS of owners S owned by salist 10% of ownere HEAITH AND NUTRITION Population per physician 5,800 /u 4,600 27,311 /c 2,712 f 790 ;e Pepulation per nursing person 5,1L0 L 5,11o 8,320 77 1,970ft 370 Z_v Pepulation per hospital bad 2,600 ft 1,620 /x. 1, 450 7 850 L nO /c.c Per capita calorie supply as S of requirementi /5 95 93 93 85 125 Per capita protein supply, total (grono per dayV/ 55 53 53 go 90 Of which, aninal and pulse 19 f 16 lob 14 ft 22 57 Death rate 1-4 years /7 44 70.7 DIOCATION d.justed /8 primary school enrollment ratio 42 79 /ac 71 112 /cad 110 Adjusted Lg secondary school enrollment ratio 10 28 a 12 45 ~a7 72 Years of schooling provided, first and asond level 12 12 12 10 13 Vocational enrollment as 5 of sec. school enrollment 4 6 28 10 4Z, 5 Adult literacy rats % 24ftg 36 ah 56 /c.i 72 /dft 97 x re No. of persons per room (urban) 2.6 /Lj.