India - Economic situation and prospects

Report No. 2431-IN Economic Situation and Prospects of India FILE COPY April 9, 1979 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 official duties. Its contents may not ijtherwise be disclosed 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 mid-December 1971: US$1.00 = Rs 7.50 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 (end-December US$1.00 = Rs 8.188 1978): Rs 1.00 = US$0.122 Rupee trade figures have been converted into dollars by using the prevailing exchange rate up to 1970/71. For subsequent years the following average IMF trade conver- sion factors/market rates have been used (rupees per US dollar): 1971/72 : 7.444 1972/73 7.706 1973/74 : 7.791 1974/75 : 7.976 1975/76 : 8.653 1976/77 : 8.939 1977/78 : 8.563 For 1978/79, the average market rate for the first nine months was Rs 8.211. For the year as a whole the rate of Rs 8.2 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 the World Bank head- quarters under the guidance of J. Kraske (Resident Mission Chief) and 0. Yenal (Principal Economist). The major contributors were M. Baird, G. Beier, W. Gilmartin, C. Taylor and J. Wall. Others contributing to the report include P. Dax, R. Grawe, J. Harrison, L. Laurenti, A. Pinell-Siles, S. Sengupta and C. Wallich. 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 disclosed without World Bank authorization.   ECONOMIC SITUATION AND PROSPECTS OF INDIA Table of Contents Page No. Basic Data Map Summary and Conclusions ..............................---------- i ix Chapter 1. Current Developments ...............................1 A. Growth ................................................ 1 B. Policies ............................................. 2 C. Expenditures and Resources ........................... 4 Chapter 2. India's Development Strategy: The New Plan .... .... 11 A. Targets and Achievements ............................. 12 B. Sectoral Priorities .................................. 18 C. Resources ............................................ 24 Chapter 3. Agriculture ........................................ 36 A. Foodgrain Production and Prospects ................... 38 B. Non-Foodgrain Agricultural Products .... .............. 52 C. Reducing Rural Poverty ............................... 56 Chapter 4. Industry ........................................... 71 A. Industrial Context ................................... 71 B. Industrial Investment ................................ 73 C. Small-Scale and Tiny Sectors ......................... 88 Chapter 5. Power .............................................. 96 A. The Current Situation ................................ 96 B. Medium-Term Outlook .................................. 102 C. Long-Term Issues ......... .................. 104 Statistical Appendix (Including List of Tables)  List of Text Tables and Graphs Tables Page No. Chapter 2 2.1 Sectoral Allocation of Plan Outlays ...................... 20 2.2 Balance of Payments .27 Chapter 3 3.1 Agricultural Outputs and Inputs: Past and Planned .36 3.2 Growth Rates in Agricultural Output .37 3.3 Growth in Foodgrain Production and Its Determinants 38 3.4 Wheat and Rice Production by Region .41 3.5 Annual Additions to Irrigated Area .43 3.6 Major and Medium Irrigation Potential and Utilization 44 3.7 Direct Finance for Agriculture .62 3.8 Distribution of Credit According to Borrowers in 1975/76 63 3.9 Statewise Distribution of Agricultural Credit in 1976/77 64 Chapter 4 4.1 Patterns of Industrial Growth: 1974-78 .73 4.2 Gross Domestic Investment in Private Corporate Sector 74 4.3 Private Sector Sanctions of All-India Financial Institutions 77 4.4 Assets, Sales and Profits before Tax in MRTP Companies, 1972 and 1976 .83 4.5 Total Labor Force .88 4.6 Principal Characteristics and Structural Ratios by Size of Capital in 1975/76 .89 4.7 Capital-Output Ratios for Selected Registered Industries in 1975/76 .91 4.8 Public Sector Outlay on Village and Small-Scale Industries .92 Chapter 5 5.1 Trends in Electricity Consumption and Power Capacity 97 5.2 Growth in Electricity Consumption in Major Power Consuming Industries: 1960/61-1976/77 .99 5.3 Trends in Electricity Tariffs and Reference Prices 100 5.4 Estimated Impact of Recent Power Shortages on Industry .101 5.5 Planned Increase in Installed Power Capacity .103  List of Text Tables and Graphs (continued) Graphs Page No. Chapter 1 1.1 Balance of Payments. 7 Chapter 2 2.1 Projected and Actual Plan Outlays. 13 2.2 Savings and Investment Ratios..2 2.3 Balance of Payments Projections. 28 2.4 State Expenditure and Central Transfers 33 to the States . Chapter 3 3.1 Area Under High Yielding Varieties. 40 3.2 Fertilizer Consumption. 47 3.3 Nitrogen: Paddy Price Ratio 49   INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES INDIA LAND AREA (TROUSAND SQ. KM.) INI MOST RECENT ESTIMATE) /a TOTAL 3287.6 SAME SAME NEXT HIGHER AGRICULTURAL 1818.3 MOST RECENT GEOGRAPHIC INCOME INCOME 1960 /b 1970 lb ESTIMATE /b REGION /c GROUP Id GROUP le GNP PER CAPITA(US$) 60.0 90.0 150.0 167.4 182.9 432.3 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 142.0 181.0 218.0(76) 65.7 88.9 251.7 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 434.9 547.6 631.7 /f URBAN POPULATION (PERCENT OF TOTAL) 17.6 19.5 20.6 12.8 15.0 24.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 973.0 STATIONARY POPULATION (MILLIONS) 1643.0 YEAR STATIONARY POPULATION IS REACHED 2150 POPULATION DENSITY PER SQ. KM. 132.0 167.0 192.0 85.2 46.8 42.7 PER SQ. EM. AGRICULTURAL LAND 247.0 308.0 347.0 322.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 41.0 41.6 42.0(77) 44.0 43.6 44.9 15-64 YRS. 55.9 55.3 55.0(77) 52.9 53.3 52.8 65 YRS. AND ABOVE 3.1 3.1 3.0(77) 2.9 2.9 3.0 POPULATION GROWTH RATE (PERCENT) TOTAL 1.9 2.3 2.0 2.2 2.4 2.7 URBAN 2.5jg 3.4 3.5 4.2 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 44.0 40.0 35.0(77) 45.1 44.3 42.2 CRUDE DEATH RATE (PER THOUSAND) 21.0 17.0 14.0(77) 17.3 19.7 12.4 GROSS REPRODUCTION RATE 3.2 2.9 2.4(77) 3.2 2.9 3.2 PAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. 3768.0 4518.0 USER (PERCENT OF MARRIED WOMEN) .. 12.0 11.2 13.7 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION 100.0 102.0 101.0 95.6 96.4 104.3 PER CAPITA (1969-71 = 100) PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.0 92.0 89.0 91.1 92.3 99.5 PROTEINS (GRAMS PER DAY) 51.0 53.0 48.0 49.6 50.0 56.8 OF WHICH ANIMAL AND PULSE 19.0 16.0 12.6 12.6 13.9 17.5 CHILD (AGES 1-4) MORTALITY RATE 28.0 22.0 10.0 .. . 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 41.7 48.0 51.0(77) 43.1 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) .. 134.0 134.0 99.5 102.7 82.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION TOTAL .. 17.0 33.0 30.0 26.4 31.1 URBAN .. 60.0 83.0 66.3 63.5 68.5 RURAL .. 6.0 20.0 17.2 14.1 18.2 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 18.0 20.0 15.7 16.1 37.5 URBAN ., 85.0 87.0 66.9 65.9 69.5 RURAL .. 1.0 2.0 2.5 3.4 25.4 POPULATION PER PHYSICIAN 5840.0/h 4890.0 3135.0(77) 8830.8 13432.7 9359.2 POPULATION PER NURSING PERSON 11590.0/h 5220.0 6320.0(76) 8479.3 6983.3 2762.5 POPULATION PER HOSPITAL BED TOTAL 2590.0/i 2020.0 1231.0(77) 1624.5 1157.6 786.5 URBAN .. .. .. .. 183.3 278.4 RURAL .. .. .. .. 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. .. ., .. 19.5 19.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 5.2 .. 5.2 .. 5.2 URBAN 5.2 .. 4.8 .. 4.8 RURAL 5.2 ., 5.3 .. 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 2.6 2.8 URBAN .. .. 18 2.3 RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS TOTAL .. .. .. .. 25.9 28.3 URBAN RURAL 8.7 10.3  INDIA - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES INDIA /a - MOST RECENT ESTIMATE) SA!ME SAME NEXT HIGHER HOST RECENT GEOGRAPhIC INCOME INCOME 1960 /b 1970 /b ESTIMATE /b REGION /c GROUP /d GROUP Le EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 61.0 72.0 79.0(76) 59.1 62.9 75.8 FEMALE 40.0 55.0 63.0(76) 38.4 45.9 67.9 MALE 80.0 87.0 94.0(76) SECONDARY: TOTAL 20.0 29.0 28.0(76) 19.9 14.4 17.7 FEMALE 10.0 17.0 18.0(76) 9.9 8.8 12.9 MALE 30.0 39.0 38.0(76) VOCATIONAL (PERCENT OF SECONDARY) 8.0 6.Ofl .. 1.5 6.6 7.4 PUPIL-TEACHER RATIO PRIMARY 29.0 38.0 40.0 38.2 38.5 34.3 SECONDARY 16.0 17.0 .. 23.5 19.8 23.5 ADULT LITERACY RATE (PERCENT) 28.0 33.0 36.0 35.6 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.7 1.0 1.2(76) 2.2 3.1 7.2 RADIO RECEIVERS PER THOUSAND POPULATION 5.0 21.0 24.0(76) 14.9 31.1 71.1 TV RECEIVERS PER THOUSAND POPULATION .. 0.1 0.5 .. 2.8 14.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 11.0 16.0 16.0(75) 6.4 6.0 16.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 4.0 6.3 3.8 .. 1.4 1.6 EMPLOYMENT TOTAL IABOR FORCE (THOUSANDS) 175000.0 218000.0 261000.0/k FEMALE (PERCENT) 31.3 32.6 32.2 21.3 -24.2 28.0 AGRICULTURE (PERCENT) 73.0 73.8 72.5 62.8 60.7 54.1 INDUSTRY (PERCENT) 10.4 9.8 PARTICIPATION RATE (PERCENT) TOTAL 43.0 40.2 39.2 35.8 39.8 37.8 MALE 57.1 52.3 51.3 52.4 53.3 50.3 FEMALE 27.9 27.1 26.2 15.6 19.6 20.9 ECONOMIC DEPENDENCY RATIO 1.1 1.1 1.1 1.3 1.3 1.3 INCOHE DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGEEST 5 PERCENT OF HOUSEHOLDS 26.7 25.0/1 .. 18.6 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS 51.7 53.1/1 .. 42.8 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS 4.1 4.7/1 .. 7.3 5.7 5.9 LOWEST 40 PERCENT OF HOUSEHOLDS 13.6 13.1/1 .. 19.3 16.8 15.7 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (1'S$ PER CAPITA) URBAN .. .. 83.0(77) 80.2 88.5 155.9 RURAL .. .. 73.0(77) 67.2 71.9 97.9 ESTIMATED RELATIVE POVERTY INCONE LEVEL (US$ PER CAPITA) URBAN .. .. 80.0(75) .. 100.8 143.7 RL'RAL .. .. 50.0(77) 39.8 42.0 87.3 ESTIMATED POP1LATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 47.0(77) 50.3 46.0 22.9 RURAL .. .. 52.0(77) 44.6 48.0 36.7 Not available Not applicable NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1974 and 1977. /c South Asia; /d Low Income ($280 or less per capita 1976); /e Lower Middle Income ($281-550 per capita, 1976); /f 1978 mid-year population is estimated at 640.4 million; /g 1951-60; /h 1962; /i 1958; /j 1967; Tk 1978 mid-year labor force is estimated at 261 million; /I 1964-65. March, 1979  DFIf MTONS OF SOCIAL OIMLCATOPS lutes: Although Iue vat. ar Acrn fran --orv go-armiy judged the rust authoritative and reliable, it ahocd al. be coed thaIt th.y nay -n he cotro- tiloally -aparuolo becaue f1 the lack of st4ndrdi.ed dnfiniti-ns .nd concepts usd by differet countries i oLletngrte dens. Th. d.t r, cehe.u usful to d-nrie ardors of magnitude, in,ditcate trendc, aod cthorntltriotix cetan atr difftrence hboinsconr. s The adiusted groupc -vroo for rec. hindicetor or popuietio-toighted geantric noon, encludirg thi metr. -elce of the inldicato end 1ht roar populated cocutry to each grop. Duo to Iack of data, group o ea of LI indi,catrt. for Cepita1 Sorpiac Oil E.potere end of icdicet-r of Acc... to saner ond ...r-te disposal, Housig.& Isocus diatc,btiho -s and Povert fo,r Other ..-try groups Ite populatic-wslght4d gom,tric neo.- cithout e-lusio of the- mer . cues -nd acd mast pop:olered -cnny. Si... the --vR.c of co-ties soon the irdic...tor derpede- us-ilebility of data -cd isrt -,if.=n. cectle ..otc he eercisrd In rlutng oersas f on indios,or cs so he. -o avrgs -r otly cfuasprsiaonsf 'euoe'vl hen oc-p.ri.x the vausurn indicator atotosco ieoutyodrlrneono -ANDARE otto h-.dr sq kon) Prlteuprcyiin-Population divided hy eteb.r of pntltsphyni- Total- Toal srfen are rurnirtg lud urn and inland eaen..ar qul fie r-n a ndicel nuhuoI at -i-verity leve. Agrivucu.1tt. - Ofos.t recen t netiate of agrfnulturl nrnn veod tecpurnrly Preolanio per nclsnr -la PePulutia divided by ember of practicing or Pera-cntly for rcrpo. paatr-e, -urk- red kitchen gardeoc or to mle ned fanni greduet. erss practic.l rora...,..ed a...ear-t runes 11e follow. F.vuletion -rt hsitalbe totl. uren . ad rurl - ?eplaticn (to"ml, ure,ad rural) divie hytir repetive -oashr of hospi tal beds soy , o ozrr rot INsp per ..pit. esi Its or-or-r mart prcs via isi public nd private genera an d rpetisltaed hespita1 endye calcla hy -en cIrvec in thod amifrld Uek O,rion (1975-77 beelo); hbitti_n casters. licepit~al ar stb. I~ec pemanently staffed by 171, 10,ad 17da,eneutOophysicie. Etstbliu)marte prcvldieg ptinuip11, cutodial car are not incledId. RnusII hoepitalt, h--err, include henith und usdi- ONtAY fNyyrytONPER CAPITA hsa nottsuptir of casrtiel exergv (.-sI . c .. ctrt net pereenl s Iffdby a physicter (hut by a nediln s and liglnl erlu,mcrlgssihdo,mseradgrhea itn,cr, nidaif, etc.) uhi,ch r in-patient -c-mdotint ad electric,ity) is urn fcs eqivalent ph,pia.p-side n limited teng.'of edineI facilities. Ad.esir n teia e - T.tal r-bhe of dtbisnbn to or uicharge- POPt'LATtIOV 001VTLSTSCtethpitain divided by the -mbnr of bd. Toa cLat,11 mid-year tAlon~-is Of July 1;1l960, 1970, nd 1977 date. HoSPiS 0 ,ra ocLatior ..r... t of oct01) lecti of urbas to total ppuleticn; Aoevne sine of household (ce_rso Ierr ocushbld) - totl. rban on y-d-1 different detni ,ce ) ha -oas m-y effect c-p-rbility vf dat A horahid cnn.ite ofagoP of indivdunis ubo the Ilvieg qusrter ocn ctutri-s ud thelir main Aele bhorder or lodgerc na r ma-rt ha icciuded in the Puuoto yoeti-c houe- l Oct irtie il Puross Pouano inYear 20111 Current poPulation p-ojeti-n ar hasad on!oaO sr%oftcI-t e .rc - totl.uhn n ou -reaenne 1975 total pupulution by age and so and their urttelity end fertility Of Persn pe t.re in all, urhun, aed tur.l occupiedL . crnione1 dweilimg., rate.. Ptr.ecti-nprmtr for -otality rates coprise of 3 lees npetoey Drellinge .clude r-p-snnet ---ctue ud -n-cpied parts. aseuslig life -npecctryIt hi rth i-nr-e lg elthcnryn per capita Anc..e to ale.trti.iId..recofArlloe -.e. urban. a-d rural intnm et n es -tlf eper-n stebilfinig at 77.5 yeas onmnionaI d-eeltige hee int nlvn quartr.r at percentge of The p utort- for fer,tility rats aisn bans 2 leel- eai dclIne toal ohe, and ruro dwellings reepacti-lip. it fertility ...ording tc innue leve aed past tally pls...lsg per- fcc,ne 10hoccy nte eigscd ne of thes" 9 Conbinatios 011!CloTIO of crtali tyad fertilit~y' trod for pr.ninpros.Ajse robatrtio. st-ti ... I Pond ttn-r ta ciomy oPPul:tien. there is no g-teh Pfiriay oho - oa, aead fenle - rose. t-ce, mtate sod (male enrol- sin O i-rh rate In qusI no cbe.d-thrctel, ad als t1he se ret Of all age at the pristry level ampnrent.ges of repecive primar tirotue reain c tscat. This is ach-iveonyatr frt ility -ee cot- a.--gs oasim;ne.l incldes children aged 6-l years but delnec h. rela,ceet leve of unit net r.pcrdoctioe rete, hee .ach edjustd fur different lengths of prinacy education; for countr ies ith genraIo of -snr:1 relae .Itef exactly. The Itati-sry Population unIvesa educ-tion encnn-t man nucead 1Sf peccant sie eon Pupil. are deca ntntd o the hei of the projected chaeterintins of the bria or bhe the official achaI age. opulatlo. i theL ynuh 2000, and the rate uf declin of fertility rtet Secodar' ectco 1;;2. 1tojtel~..uI. and f-1al - Cuspured as shoe; cenodacy eua torpl"ccrt lve. ti rqure al-t font years of epprevd prinury inetructio; provides Yoar Statonry= yrrcluri- n 10 .feehed - The year che Stationry Pepela- genrere oneItna, or teac.her training it ...uoclon for pupi P. .e.. l'y cf ccv i7c hnn hoe ro-nbd. 12 te 17 year of age; Ioteprecanaee r general.ly -ncudad. O.ucleti-r desslty V-tai-noL .ecrl1net (earnetat secon-der,) - Venatiuna Jtoutitution inr,ude P.f, ot. - Oid-y-u population Per- sq-r kilonatr 1150 hetael eheini, iedutria1, c other prrgre whi,ch oprct. independently ors o:f At,ara.dspantns 00 scondryInsel,uri-ns rLl