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SUBMITTED BY-
BY-
SAPTARSHI MANDI
ROLL NO.-
NO.-MB/09/02
SEC--A;CLASS-
SEC A;CLASS-MBA(FT)
  
 
India is one of worldƞs fastest growing
economies. Apart from China, no other country has
as high an economic growth rate as India. This
country offers several economic advantages to its
nationals as well as foreign investors. Indiaƞs
economic boom has been made possible mainly
through its information technology and outsourcing
business. Indiaƞs rise as an Asian economic
powerhouse has been quite remarkable. Economic
conditions in India are now favorable for a wider
cross section of people.
   


Inflation in India rose to more than 11

percent in July 2008. But due to
government measures and role played
Reserve Bank of India, inflation was
brought down to about 6 percent.
Earlier in 2007, average inflation was
around 5.3 percent.

   

 Inflation, driven by higher fuel prices, up from

4.5%
ƛ Expected to stabilize at 6.5%
 Industrial environment improves in 1999-
1999-00, IIP
growth around 8% levels
ƛ Stronger consumer demand, tentative industrial demand,
rising exports
ƛ Cement, automotive, home goods & services are the fast
growing segment.
 Political situation shows greater signs of stability
ƛ Wider dispersion amongst partners makes the coalition
less vulnerable

   
 Resurgence in Portfolio Flows (FII) during 2000,
FDI flows expected to pick up speed with greater
clarity in policy
 Foreign Debt Under Control at less than 24% of
GDP
ƛ External debt service ratio at < 2% of GDP
Large part of debt 40% concessional and short term part is
only 5% of total debt.
 Rupee Depreciation only 2.17% in 1999-
1999-00,
another 2% since April 2000
ƛ Annual rate of depreciation estimated to be around 4.5
4.5--
5%


 
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 Centers around strong domestic industry but trade barriers are being
dismantled in accordance with commitments
ƛ Increased importance on housing and rural industrialization
ƛ Product patents in place, import curbs lifted on several commodities
ƛ Attempts to create a rural industrial base (around small industry)
ƛ Investments guided by competitive advantages/ economic considerations
rather than licensing restrictions / allowances
 Strong industrial growth averaging 7% in the last five years
 Significant progress in opening up telecom and power sectors
 Privatization of PSUs (GOI holding upto 26%), closure of sick units,
repeal of the Urban Land Ceiling Regulations, etc.
 Significant capital flows generated from 1991 to 1998
ƛ FDI - $15 Bn; Portfolio (FII) - $12Bn;
ƛ FCY reserves increased from $2Bn in 1991 to over $35Bn as of Aprilƞ2000

 Need to target GDP growth of 8-

8-10%


 
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 Liberalize and ease domestic consumption and investment
ƛ India ranked 41st in competitiveness
 Strengthen the contribution from the export markets
 Promote and channel private and foreign investments into
infrastructure
ƛ Required investment of $120Bn over next five years to sustain
planned growth
ƛ Current domestic savings of 24% needs to be augmented by
foreign investments ~ $10Bn p.a.
 Maintain financial and currency stability
ƛ Controlled moderate inflation
ƛ Cap on fiscal deficit, Bill on fiscal responsibility soon
 Clearer focus on planned government capital expenditure
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 Growth would continue to be led by consumer demand growth
ƛ Infrastructure would start contributing towards the end
 Rural economy to reduce dependence on agriculture
ƛ Stabilize the rural consumption patterns
ƛ Provide exponential growth window for consumer goods makers
 Government will step in to support investment climate
ƛ Fiscal deficit levels would continue to be high
ƛ Government expenditure under closer inspection
 Industrial investments guided by competitive advantages/ economic
considerations rather than licensing restrictions / allowances
 High growth will continue in:
ƛ Infotech, telecom, transport vehicles (mainly personal transport vehicles),
consumer electronics, apparel, convenience foods, pharmaceuticals,
financial products (savings products)