School of Business

Management

& Liberal Arts

MASTER OF BUSINESS ADMINISTRATION

A project on

India VS Japan

SUBMITTED BY: SUBMITTED TO:

Pravesh Thakur Dr. (Ms) Kesari Singh

MBA Quad 2
Reg. No. 1871401112
 India vs Japan

o Economy overview

 India

India's diverse economy encompasses traditional village farming, modern

agriculture, handicrafts, a wide range of modern industries, and a multitude of services.
Slightly less than half of the workforce is in agriculture, but services are the major source of
economic growth, accounting for nearly two-thirds of India's output but employing less than
one-third of its labour force. But, per capita income remains below the world average.

India is developing into an open-market economy, yet traces of its past policies remain.
Economic liberalization measures, including industrial deregulation, privatization of state-
owned enterprises, and reduced controls on foreign trade and investment, began in the early
1990s and served to accelerate the country's growth, which averaged nearly 7% per year
from 1997 to 2017. India's economic growth slowed in 2011 because of a decline in
investment caused by high interest rates, rising inflation, and investor pessimism about the
government's commitment to further economic reforms and about slow world growth. Rising
macroeconomic imbalances in India and improving economic conditions in Western
countries led investors to shift capital away from India, prompting a sharp depreciation of the
rupee through 2016.

Growth rebounded in 2014 through 2016, exceeding 7% each year, but slowed in 2017.
Investors’ perceptions of India improved in early 2014, due to a reduction of the current
account deficit and expectations of post-election economic reform, resulting in a surge of
inbound capital flows and stabilization of the rupee. Since the election, the government has
passed an important goods and services tax bill and raised foreign direct investment caps in
some sectors, but most economic reforms have focused on administrative and governance
changes largely because the ruling party remains a minority in India’s upper house of
Parliament, which must approve most bills. Despite a high growth rate compared to the rest
of the world, India’s government-owned banks faced mounting bad debt in 2015 and 2016,
resulting in low credit growth and restrained economic growth.

The outlook for India's long-term growth is moderately positive due to a young population
and corresponding low dependency ratio, healthy savings and investment rates, and
increasing integration into the global economy. However, long-term challenges remain
significant, including: India's discrimination against women and girls, an inefficient power
generation and distribution system, ineffective enforcement of intellectual property rights,
decades-long civil litigation dockets, inadequate transport and agricultural infrastructure,
limited non-agricultural employment opportunities, high spending and poorly targeted
subsidies, inadequate availability of quality basic and higher education, and accommodating
rural-to-urban migration.
  Japan

Over the past 70 years, government-industry cooperation, a strong work ethic,

mastery of high technology, and a comparatively small defence allocation (slightly less than
1% of GDP) have helped Japan develop an advanced economy. Two notable characteristics
of the post-World War II economy were the close interlocking structures of manufacturers,
suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for
a substantial portion of the urban labour force. Both features have significantly eroded under
the dual pressures of global competition and domestic demographic change.

Measured on a purchasing power parity basis that adjusts for price differences, Japan in
2017 stood as the fourth-largest economy in the world after first-place China, which
surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. For three
post-war decades, overall real economic growth was impressive - a 10% average in the
1960s, 5% in the 1970s, and 4% in the 1980s. Growth slowed markedly in the 1990s,
averaging just 1.7%, largely because of the aftereffects of inefficient investment and the
collapse of an asset price in the late 1980s, which entailed considerable time for firms to
reduce excess debt, capital, and labour. Modest economic growth continued after 2000, but
the economy has fallen into recession four times since 2008.

Japan enjoyed an uptick in growth in 2013 on the basis of Prime Minister Shinzo ABE’s
“Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing,
“flexible” fiscal policy, and structural reform. Led by the Bank of Japan’s aggressive
monetary easing, Japan is making modest progress in ending deflation, but demographic
decline – a low birth-rate and an aging, shrinking population – poses a major long-term
challenge for the economy. The government currently faces the quandary of balancing its
efforts to stimulate growth and institute economic reforms with the necessity of addressing
its sizable public debt, which stands at 235% of GDP. To help raise government revenue,
Japan adopted legislation in 2012 to gradually raise the consumption tax rate. However, the
first such increase, in April 2014, led to another recession, so Prime Minister ABE has twice
postponed the next increase, now scheduled for October 2019. Structural reforms to unlock
productivity are seen as central to strengthening the economy in the long-run.

Scarce in critical natural resources, Japan has long been dependent on imported energy and
raw materials. After the complete shutdown of Japan’s nuclear reactors following the
earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more
dependent than before on imported fossil fuels. However, ABE’s government is seeking to
restart nuclear power plants that meet strict new safety standards and is emphasizing
nuclear energy’s importance as a base-load electricity source. In August 2015, Japan
successfully restarted one nuclear reactor at the Sendai Nuclear Power Plant in Kagoshima
prefecture, and several other reactors around the country have since resumed operations;
however, opposition from local governments has delayed several more restarts that remain
pending. Reforms of the electricity and gas sectors, including full liberalization of Japan’s
energy market in April 2016 and gas market in April 2017, constitute an important part of
Prime Minister Abe’s economic program.
 o GDP (Gross Domestic Product)

The gross domestic product (GDP) measures of national income and output for a given
country's economy. The gross domestic product (GDP) is equal to the total expenditures
for all final goods and services produced within the country in a stipulated period of time.

India Japan
2.690 trillion USD (2018) 5.071 trillion USD (2018)

o GDP – composition by sector

India (2017 est.) Japan (2017 est.)

Agriculture: 16.8% Agriculture: 1%
Industry: 28.9% Industry: 29.7%
Services: 46.6% Services: 69.3%

o Inflation rate

The term "inflation" originally referred to a rise in the general price level caused by an
imbalance between the quantity of money and trade needs. However, it is common
for economists today to use the term "inflation" to refer to a rise in the price level.

India Japan
3.8% (2017 est.) 0.4% (2017 est.)
4.5% (2016 est.) -0.1% (2016 est.)

o Labour force

All the people in a particular country who are of the right age to work, or all the
people who work for a particular company.

India Japan
520.2 million (2017 est.) 67.77 million (2017 est.)
 o Labour force - by occupation

India (FY 2014 est.) Japan (February 2015 est)

Agriculture: 47% Agriculture: 2.9%
Industry: 22% Industry: 26.2%
Services: 31% Services: 70.9%

o Unemployment rate

India Japan
8% (2016 est.) 3.1% (2016 est.)
8.8% (2017 est.) 2.9% (2017 est.)

o Budget

A budget is a financial plan for a defined period, often one year. It may also include
planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities
and cash flows.

India Japan
Total revenue: US$ 330 billion Total revenue: US$1.678 trillion
Total expenditures: US$ 410 billion (2018-19) Total expenditures: US$1.902 trillion (2017 est.)

o Industries

 India
Textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum,
machinery, software, pharmaceuticals

 Japan
Among world's largest and most technologically advanced producers of motor vehicles, electronic
equipment, machine tools, steel and nonferrous metals, ships, chemicals, textiles, processed foods
 o Industrial production growth rate

India Japan
7.5% (2017 est.) 1.4% (2017 est.)

 Imports and Exports

o Exports

India Japan
$299.3 billion (2017 est.) $683.3 billion (2017 est.)
$268.6 billion (2016 est.) $634.9 billion (2016 est.)

o Exports - commodities

India - petroleum products, precious stones, vehicles, machinery, iron and steel, chemicals,
pharmaceutical products, cereals, etc.

Japan - motor vehicles, iron and steel products, semiconductors, auto parts, power generating
machinery, plastic materials, etc.

o Exports - partners

India - US, UAE, Hong Kong, China, UK, Singapore, etc.

Japan - US, China, South Korea, Hong Kong, Thailand, etc.

o Imports

India Japan
$426.8 billion (2017 est.) $625.7 billion (2017 est.)
$376.1 billion (2016 est.) $583.5 billion (2016 est.)
 o Imports - commodities

India – crude oil, precious stones, machinery, chemicals, fertilizer, plastics, iron and steel, etc.
Japan - petroleum, liquid natural gas, clothing, semiconductors, coal audio and visual apparatus

o Imports - partners

India - China, Saudi Arabia, Switzerland, US, UAE, Indonesia, etc.

Japan - China, US, Australia, South Korea, etc.