Economic Scenario of India

Presented By Swastik Malusare (30)

Economic Growth
Indian economy is growing, despite the economic

crisis that engulfed the world with the national investment rate at around 33-34% and is expected to increase to 36% by the end of 12th Five Year Plan (2012-17). India has been adjourned the fifth best country in the world for dynamic growing businesses and gives a reflection of how suitable an environment the country offers for dynamic businesses. Indian tax climate was also considered to be reasonably favorable and India continued to be an attractive investment destination.

 India is expected to be the second largest

manufacturing country in the next five years, followed by Brazil as the third ranked country.
Indian companies have raised 3.17 billion (US$

4.29 billion), through external commercial borrowings (ECBs) and foreign currency convertible bonds (FCCBs) in October 2012, to fund modernization, foreign acquisitions, import of capital goods and onward lending.

 The

cumulative amount of foreign direct investments (FDI) equity inflows into India were worth 138,975 million (US$ 187,804 million) between April 2000 to December 2012, while FDI equity inflow during April 2012 to December 2012 was recorded as 12540.04 million (US$ 16,946 million), according to the latest data published by Department of Industrial Policy and Promotion (DIPP).

Foreign institutional investors (FIIs) made a net

investment of 50.66 million (US$ 68.46 million) in the equity market and 11.04 billion (US$ 14.92 million) in the debt market upto February this year.

 The Indian economy is estimated to grow at a

higher rate of 6.7% in 2013-14 due to revival in consumption.

India's GDP growth in 2013 - 14 will be supported

by the revival of private sector consumption growth aided by higher growth in agriculture, high government spending and lower interest rates.
The Indian economy would grow at a rate of

between 5 and 5.5 % in the April-June quarter, up from 5.3% in the preceding quarter and could expand by 7 % in 2013-14.

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recent industrial production data which reflects the health of mainly the manufacturing sector, has also portrayed a dismal picture. Manufacturing constitutes almost 75% of the IIP.

The factory output measured in terms of the

Index of Industrial Production (IIP) for December 2012 has contracted by 0.6% for the second straight month.
The government aims to restrict fiscal deficit in

the current financial year at 5.3% of GDP and bring it down to 4.8% in 2013-14.

 It was announced in the Budget that gross

borrowing will be 87538.46 million (Rs 5.69 lakh crore) for the current fiscal. The Government borrowed nearly 56923.08 million (Rs 3.70 lakh crore) in the first half (AprilSeptember, 2012), while remaining 30769.23 million (Rs 2 lakh crore) was scheduled to be raised in the second half (October, 2012-March, 2013). Till date, the Government has so far borrowed nearly, 85846.15 million (Rs 5.58 lakh crore). The Government is hence putting some control on the expenditure and with this decision it is evident that the fiscal deficit will be under check.

Thank You !!