INFRASTRUCTURE WINNER IN BUDGET 2009-10
In the Indian Financial Budget announcement for the fiscal year 2009-10, the first budget since the Indian National Congress led United Progressive Alliance (UPA) government won its second consecutive term to power in May this year, the infrastructure sector emerged winner as it was accorded top priority by the Indian Finance Minister.
This reinforces the government’s commitment to augment the antiquated infrastructure of the country, vital to achieve a Gross Domestic Product (GDP) growth of 9% per annum from the current 6.7%. The lack of adequate infrastructure is responsible for pushing back India’s GDP growth by about 2% annually, according to estimates.
The minster responded to an urgent demand for new infrastructure, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014, from the current 5%. Estimates suggest that a third of this investment will come from private companies, paving the way for unprecedented investment opportunity under Public Private Partnership (PPP) model.
“However, the Finance Minister missed this opportunity to address sectoral reforms and liberalization in Foreign Direct Investment (FDI) norms, falling short of the investors’ expectations who sent the Sensex, the benchmark index of the Bombay Stock Exchange down 870 points to 14,043.40 (5.83%) on Monday, the level that it was at in the month of May. The minister further disappointed by not being explicit on the aspect of disinvestment of the Public Sector Undertakings (PSUs).” says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm.
“India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year”
“The government’s spotlight on Infrastructure Development heralds the importance it attaches to the sector as a means to counter the prevailing economic woes.” added Rangar
Recognising that good infrastructure are a vital pre-requisite to build a strong nation, infrastructure development had been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
“These initiatives pale when compared to China that spends about 11% of its GDP for infrastructure development, indicative of the scope and extent of scaling up needed in infrastructure development in India to match global standards.” added Rangar
“The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages announced last year, had set the ground for how the alliance was approaching the General Elections that took place in May.” said Rangar
The minister was way short of taking the initiative further as various sectors including, pharmaceutical, retail, telecommunication, aviation, insurance, among others keenly awaited reforms to facilitate higher foreign investments. These sectors collectively have the potential to attract more $200 billion worth of investments over a period of five to ten years.
Indian Telecom: Scope of Growth & Investment
“India’s mobile telecommunication services sector has defied the economic recession. The incumbent mobile telecommunication service providers collectively add more than 10 million new subscribers a month, which is more than the population of Finland, home country of largest mobile handset manufacturer Nokia Corp., taking the country’s total tally of wireless subscribers to 400 million.” explains Rangar
To ensure quality service to match the growing subscriber base and achieve the target of 45% tele-density, the telecom sector is estimated to need about $73 billion during the next five years.
The world's fastest-growing mobile telecom services market estimated to reach a subscriber base of more than one billion by 2014, exposes the growth potential in investments that the sector can attract from aspiring global mobile telecom service providers.
Pharmaceutical Sector: Prescription for M&As
The Indian Pharmaceutical sector is positioning itself to be among the top five centres of global innovation as the Department of Pharmaceuticals (DoP), Government of India outlined its roadmap for the sector up to the year 2020 (Vision 2020). It foresees investments of about $2 billion annually, under the public-private partnership model.
“This spells out the scope of growth for global pharmaceutical companies and can fuel the next wave of mergers and acquisitions (M&As) in a market where consumer spending on healthcare increased to 7% in 2007 from 4% of the Gross Domestic Product (GDP) in 1995 and is expected to rise to 13% of GDP by 2015.” says Rangar
India also offers the benefits of low cost research and development (R&D), a domain in which it is estimated to capture about 10%-20% share of the world’s R&D business by 2020 from less than 1% currently.
Expansion by global pharmaceutical companies in to emerging markets like India becomes imperative as about $103 billion worth of patented drugs will go off patent in the next few years.
Retail Sector
“The retail sector in India is witnessing a huge revamp as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Easing regulations in the sector would help bring the benefits of organised retail to customers.” said Rangar
The overall retail market is expected to grow to more than $1 trillion from $262 billion by 2016, with organised retail at $165 billion, according to the Investment commission of India.
Aviation Sector
India’s aviation sector presents investment opportunities of $110 billion envisaged up to 2020 $80 billion in new aircraft and $30 billion in development of airport infrastructure. The investments will be needed to cater for approximately 300 million passengers that are expected to be airborne by 2020, according to estimates.
“With such sectoral growth indicators, the need of the hour was to take existing initiatives to the next level of implementation and completion, with enough scope of ramping up and innovation. To that extent, the finance minister would have helped by being more generous and explicit in his policy initiatives.” said Rangar
Showing posts with label GDP growth. Show all posts
Showing posts with label GDP growth. Show all posts
Wednesday, July 08, 2009
Saturday, May 16, 2009
UPA TO CONTINUE IN GOVERNMENT: ADVANTAGE REFORMS AND DEVELOPMENT
--- Potential Investments Worth $700 billion To Go On Track
--- Power & Energy, Infrastructure, Telecommunication and Pharmaceuticals To Drive The Next Wave Of Investments
If the trends emerging from the counting of votes are to be believed in the General Elections for the 15th Lok Sabha or the House of the People, the Indian National Congress led United Progressive Alliance (UPA) will most likely be the victor that would be an affirmation of its economic policies of continued liberalization.
The results so far indicate that the United Progressive Alliance (UPA) with 48% seats out of 543 will likely form the government with support from smaller regional parties. The outcome will usher a new wave of confidence globally in the Indian economy with expected ramp up in economic activity, brought about by the urgent need to develop world class infrastructure, globally competitive pharmaceutical sector, telecom and augmentation of power generation.
“The government will have its task cut out with more than $700 billion worth of investments to be channeled in to India’s infrastructure, power, telecom and pharma sectors over the next five years to provide the country a strong foundation to achieve the aspirational growth of 10%.” says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm.
The General Elections this time witnessed a three-way contest between the Indian National Congress led United Progressive Alliance (UPA), Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) and Third Front, comprising of the Communist Parties and smaller regional parties, attempting to offer another alternative.
Both the Congress and BJP led governments have successfully accelerated India’s GDP growth rate to about 7% today from 1.4% in 1991-92. This momentum peaked at 9.7% in the fiscal year 2006-07 before slowing down on account of the worldwide recession.
“The Government would be best served if it continued and augmented the ‘India Shining’ policies that currently sustain a Gross Domestic Product (GDP) growth of more than 7% as India continues to defy negative GDP growth seen in many Western economies.” says Rangar
Investment in Energy
India’s power deficit entails an estimated investment of up to $150 billion by 2012. To meet the growing demand, the government plans to add 90GW over the same period to its existing generation capacity of 145GW.
“India will become a lucrative market for nuclear energy equipment makers as soon as The United States-India Peaceful Atomic Energy Cooperation Act of 2006 between India and the U.S. starts to show the benefits of investments coming in to the country.” says Rangar
Nuclear energy makes up only 3% of total installed capacity in India and its domestic uranium reserves are also limited. India’s Atomic Energy Commission estimates that domestic resources could support only 10 GW of installed nuclear capacity, signifying the potential of a multifold ramp-up.
Favourable policy initiatives could see global energy companies such as Areva SA, Alstom SA and Électricité de France (EDF) of France; the U.S.-based General Electric Co., Russia's state-owned nuclear company Rosatom State Nuclear Energy Corporation and Toshiba Corp., a diversified Japanese conglomerate, among others vying to enter India’s nuclear energy market.
Infrastructure: Foundation of Growth
India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year.
Recognising that good infrastructure are a vital pre-requisite to build a strong nation, infrastructure development has been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
“The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages announced last year had set the ground for how the alliance was approaching the General Elections.” said Rangar
The government’s spotlight on Infrastructure Development heralds the importance it attaches to the sector as a means to counter the prevailing economic woes. The minster responded to an urgent demand for new infrastructure, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014, from the current 5%. Estimates suggest that a third of this investment will come from private companies, paving the way for unprecedented investment opportunity
Telecom: Dial India For Growth
“India’s mobile telecommunication services sector has defied the economic recession. The incumbent mobile telecommunication service providers collectively add about 10 million new subscribers a month, which is more than the population of Finland, home country of largest mobile handset manufacturer Nokia Corp., taking the country’s total tally of wireless subscribers to 362 million.” explains Rangar
To ensure quality service to match the growing subscriber base and achieve the target of 45% tele-density, the telecom sector is estimated to need about $73 billion during the next five years.
The world's fastest-growing mobile telecom services market estimated to reach a subscriber base of about 650 million by 2012, exposes the growth potential for global mobile telecom service providers who are not yet present in India. Such service providers are missing out on opportunities to grab a share of the projected mobile services revenues of more than $37 billion by 2012 growing at a CAGR of 18%, while the profitability of their operations in saturated developed markets continue to be under pressure.
Of significance is the fact that the government has granted new licenses and spectrum to aspiring operators such as Datacom Solutions a subsidiary of one of India’s leading consumer durables company Videocon Industries Ltd; Loop Telecom, a BPL Mobile Communications group company; S Tel Ltd, joint venture between Skycity Foundations and Telecom Investments (Mauritius) Ltd; among others which are likely targets – but within the regulatory purview as an overseas entity’s stake in the domestic company cannot exceed 74%.
Indian Pharma: Prescription for Growth
The Indian Pharmaceutical sector is positioning itself to be among the top five centres of global innovation as the Department of Pharmaceuticals (DoP), Government of India outlines its roadmap for the sector up to the year 2020 (Vision 2020). It foresees investments of about $2 billion annually, under the public-private partnership model.
The initiative will open avenues of growth for global pharmaceuticals companies and fuel the next wave of mergers and acquisitions (M&As) in a market where consumer spending on healthcare increased to 7% in 2007 from 4% of the Gross Domestic Product (GDP) in 1995 and is expected to rise to 13% of GDP by 2015. India also offers the benefits of low cost research and development (R&D), a domain in which it is estimated to capture about 10%-20% share of the world’s R&D business by 2020 from less than 1% currently.
Expansion by global pharmaceutical companies in to emerging markets like India becomes imperative as about $103 billion worth of patented drugs will go off patent in the next few years. This will further hit the already sagging fortunes of global pharma companies which are trying to augment their revenues by acquiring or aligning with companies in the generics business.
With such sectoral growth indicators, the need of the hour is to take existing initiatives to the next level of implementation and completion, with enough scope of ramping up and innovation.
--- Potential Investments Worth $700 billion To Go On Track
--- Power & Energy, Infrastructure, Telecommunication and Pharmaceuticals To Drive The Next Wave Of Investments
If the trends emerging from the counting of votes are to be believed in the General Elections for the 15th Lok Sabha or the House of the People, the Indian National Congress led United Progressive Alliance (UPA) will most likely be the victor that would be an affirmation of its economic policies of continued liberalization.
The results so far indicate that the United Progressive Alliance (UPA) with 48% seats out of 543 will likely form the government with support from smaller regional parties. The outcome will usher a new wave of confidence globally in the Indian economy with expected ramp up in economic activity, brought about by the urgent need to develop world class infrastructure, globally competitive pharmaceutical sector, telecom and augmentation of power generation.
“The government will have its task cut out with more than $700 billion worth of investments to be channeled in to India’s infrastructure, power, telecom and pharma sectors over the next five years to provide the country a strong foundation to achieve the aspirational growth of 10%.” says Bundeep Singh Rangar, Chairman, IndusView Advisors Ltd, the India-focused cross-border advisory firm.
The General Elections this time witnessed a three-way contest between the Indian National Congress led United Progressive Alliance (UPA), Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) and Third Front, comprising of the Communist Parties and smaller regional parties, attempting to offer another alternative.
Both the Congress and BJP led governments have successfully accelerated India’s GDP growth rate to about 7% today from 1.4% in 1991-92. This momentum peaked at 9.7% in the fiscal year 2006-07 before slowing down on account of the worldwide recession.
“The Government would be best served if it continued and augmented the ‘India Shining’ policies that currently sustain a Gross Domestic Product (GDP) growth of more than 7% as India continues to defy negative GDP growth seen in many Western economies.” says Rangar
Investment in Energy
India’s power deficit entails an estimated investment of up to $150 billion by 2012. To meet the growing demand, the government plans to add 90GW over the same period to its existing generation capacity of 145GW.
“India will become a lucrative market for nuclear energy equipment makers as soon as The United States-India Peaceful Atomic Energy Cooperation Act of 2006 between India and the U.S. starts to show the benefits of investments coming in to the country.” says Rangar
Nuclear energy makes up only 3% of total installed capacity in India and its domestic uranium reserves are also limited. India’s Atomic Energy Commission estimates that domestic resources could support only 10 GW of installed nuclear capacity, signifying the potential of a multifold ramp-up.
Favourable policy initiatives could see global energy companies such as Areva SA, Alstom SA and Électricité de France (EDF) of France; the U.S.-based General Electric Co., Russia's state-owned nuclear company Rosatom State Nuclear Energy Corporation and Toshiba Corp., a diversified Japanese conglomerate, among others vying to enter India’s nuclear energy market.
Infrastructure: Foundation of Growth
India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year.
Recognising that good infrastructure are a vital pre-requisite to build a strong nation, infrastructure development has been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
“The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages announced last year had set the ground for how the alliance was approaching the General Elections.” said Rangar
The government’s spotlight on Infrastructure Development heralds the importance it attaches to the sector as a means to counter the prevailing economic woes. The minster responded to an urgent demand for new infrastructure, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014, from the current 5%. Estimates suggest that a third of this investment will come from private companies, paving the way for unprecedented investment opportunity
Telecom: Dial India For Growth
“India’s mobile telecommunication services sector has defied the economic recession. The incumbent mobile telecommunication service providers collectively add about 10 million new subscribers a month, which is more than the population of Finland, home country of largest mobile handset manufacturer Nokia Corp., taking the country’s total tally of wireless subscribers to 362 million.” explains Rangar
To ensure quality service to match the growing subscriber base and achieve the target of 45% tele-density, the telecom sector is estimated to need about $73 billion during the next five years.
The world's fastest-growing mobile telecom services market estimated to reach a subscriber base of about 650 million by 2012, exposes the growth potential for global mobile telecom service providers who are not yet present in India. Such service providers are missing out on opportunities to grab a share of the projected mobile services revenues of more than $37 billion by 2012 growing at a CAGR of 18%, while the profitability of their operations in saturated developed markets continue to be under pressure.
Of significance is the fact that the government has granted new licenses and spectrum to aspiring operators such as Datacom Solutions a subsidiary of one of India’s leading consumer durables company Videocon Industries Ltd; Loop Telecom, a BPL Mobile Communications group company; S Tel Ltd, joint venture between Skycity Foundations and Telecom Investments (Mauritius) Ltd; among others which are likely targets – but within the regulatory purview as an overseas entity’s stake in the domestic company cannot exceed 74%.
Indian Pharma: Prescription for Growth
The Indian Pharmaceutical sector is positioning itself to be among the top five centres of global innovation as the Department of Pharmaceuticals (DoP), Government of India outlines its roadmap for the sector up to the year 2020 (Vision 2020). It foresees investments of about $2 billion annually, under the public-private partnership model.
The initiative will open avenues of growth for global pharmaceuticals companies and fuel the next wave of mergers and acquisitions (M&As) in a market where consumer spending on healthcare increased to 7% in 2007 from 4% of the Gross Domestic Product (GDP) in 1995 and is expected to rise to 13% of GDP by 2015. India also offers the benefits of low cost research and development (R&D), a domain in which it is estimated to capture about 10%-20% share of the world’s R&D business by 2020 from less than 1% currently.
Expansion by global pharmaceutical companies in to emerging markets like India becomes imperative as about $103 billion worth of patented drugs will go off patent in the next few years. This will further hit the already sagging fortunes of global pharma companies which are trying to augment their revenues by acquiring or aligning with companies in the generics business.
With such sectoral growth indicators, the need of the hour is to take existing initiatives to the next level of implementation and completion, with enough scope of ramping up and innovation.
Thursday, May 14, 2009
REVIVAL TRENDS: INDIA SHINING
If historical patterns are anything to go by, the voting in of the 15th Lok Sabha or the House of the People, the directly elected lower house of the Parliament of India, will mark a starting point for a sharp ramp-up in economic activity for the country. Economic activity, as measured by industrial production index, had increased immediately after five elections out of seven polls since 1984, as political stability provided a platform for economic growth.
Economic activity has risen consecutively following the last three elections held on 1998, 1999 and 2004. A comparison of industrial production (IP) data before elections and six months after elections, shows that on five occasions, the IP index rose by 20-80 basis points, according to data from Goldman Sachs Global ECS Research.
The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages that set the ground for how the alliance was approaching the General Elections.
The new Government that comes in to power would be best served if it continued and augmented the “India Shining” policies that currently sustain a Gross Domestic Product (GDP) growth of more than 7% as India continues to defy negative GDP growth seen in many Western economies.
Such growth initiatives have led to an economic revival in key sectors like steel, cement, automobile, food and beverages and fast moving consumer goods (FMCG) (See Vol 4 | Issue 3 ‘Clearing The FDI Highway’) that are best not derailed.
If historical patterns are anything to go by, the voting in of the 15th Lok Sabha or the House of the People, the directly elected lower house of the Parliament of India, will mark a starting point for a sharp ramp-up in economic activity for the country. Economic activity, as measured by industrial production index, had increased immediately after five elections out of seven polls since 1984, as political stability provided a platform for economic growth.
Economic activity has risen consecutively following the last three elections held on 1998, 1999 and 2004. A comparison of industrial production (IP) data before elections and six months after elections, shows that on five occasions, the IP index rose by 20-80 basis points, according to data from Goldman Sachs Global ECS Research.
The Interim Budget for the financial year 2009-10 announced in February by the Finance Minister of the ruling United Progressive Alliance (UPA), focused on infrastructure development, easing of Foreign Direct Investments (FDIs) norms and economic stimulus packages that set the ground for how the alliance was approaching the General Elections.
The new Government that comes in to power would be best served if it continued and augmented the “India Shining” policies that currently sustain a Gross Domestic Product (GDP) growth of more than 7% as India continues to defy negative GDP growth seen in many Western economies.
Such growth initiatives have led to an economic revival in key sectors like steel, cement, automobile, food and beverages and fast moving consumer goods (FMCG) (See Vol 4 | Issue 3 ‘Clearing The FDI Highway’) that are best not derailed.
GENERAL ELECTIONS: THREE-WAY TUSSLE
India’s month long General Elections, which will decide the political framework of the next government, is turning out to be a three-way contest.
The tussle for power used to be bi-polar one between the two largest national political alliances, the Indian National Congress led United Progressive Alliance (UPA) and Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA). Now this has turned to be three-way one with a Third Front, comprising of the Communist Parties and smaller regional parties, presenting another alternative. An emerging power broker is likely to be the Bahujan Samaj Party (BSP), representing low-caste interests, that runs the state government in India’s largest province Uttar Pradesh. It is likely to win significant seats.
The Communist Parties emerged as a prominent force following their intense opposition to the Indo-U.S. Civil Nuclear Agreement that threatened the survival of India’s ruling coalition government of the United Progressive Alliance (UPA) last year.
This three way contest, however, has a bi-polar implication. On the one hand, the UPA and the NDA alliances have the experience of successfully running a National Government that propelled India to grow its Gross Domestic Product (GDP) more than 9% in recent years. On the other hand, the inexperienced Third Front has never been able to provide a stable government having only ever been in power for less than half of any full five-year term. Moreover, they are likely to be less inclined to open up India’s economy that has been turbo-charged over the past decade. Election results are due to be announced on May 16th.
Both the Congress and BJP led governments have successfully accelerated India’s GDP growth rate to about 7% today from 1.4% in 1991-92. This momentum peaked at 9.7% in the fiscal year 2006-07 before slowing down on account of the worldwide recession.
India’s month long General Elections, which will decide the political framework of the next government, is turning out to be a three-way contest.
The tussle for power used to be bi-polar one between the two largest national political alliances, the Indian National Congress led United Progressive Alliance (UPA) and Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA). Now this has turned to be three-way one with a Third Front, comprising of the Communist Parties and smaller regional parties, presenting another alternative. An emerging power broker is likely to be the Bahujan Samaj Party (BSP), representing low-caste interests, that runs the state government in India’s largest province Uttar Pradesh. It is likely to win significant seats.
The Communist Parties emerged as a prominent force following their intense opposition to the Indo-U.S. Civil Nuclear Agreement that threatened the survival of India’s ruling coalition government of the United Progressive Alliance (UPA) last year.
This three way contest, however, has a bi-polar implication. On the one hand, the UPA and the NDA alliances have the experience of successfully running a National Government that propelled India to grow its Gross Domestic Product (GDP) more than 9% in recent years. On the other hand, the inexperienced Third Front has never been able to provide a stable government having only ever been in power for less than half of any full five-year term. Moreover, they are likely to be less inclined to open up India’s economy that has been turbo-charged over the past decade. Election results are due to be announced on May 16th.
Both the Congress and BJP led governments have successfully accelerated India’s GDP growth rate to about 7% today from 1.4% in 1991-92. This momentum peaked at 9.7% in the fiscal year 2006-07 before slowing down on account of the worldwide recession.
Thursday, April 09, 2009
GENERAL ELECTIONS: ADVANTAGE INFRASTRUCTURE
'Cautiousness & Consciousness' have become the catchwords for both investors and the government as India approaches the next General Elections, which are scheduled from April 16 to May 13 amid a worldwide economic recession.
India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year.
Recognising that good governance and infrastructure are a vital pre-requisite to keep ‘India Shining’ at Gross Domestic Product (GDP) growth of more than 7%, infrastructure development has been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
The interim budget for the financial year 2009-10 announced by the Finance Minister also sets the ground for how the ruling United Progressive Alliance (UPA) will approach the General Elections, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014 (Interim Budget: Continuity Of Growth).
'Cautiousness & Consciousness' have become the catchwords for both investors and the government as India approaches the next General Elections, which are scheduled from April 16 to May 13 amid a worldwide economic recession.
India's challenge is not only to augment its antiquated infrastructure, but also to build new infrastructure to keep up with its $1 trillion economy and the aspirations of its 1.2 billion population that grows by 16 million people each year.
Recognising that good governance and infrastructure are a vital pre-requisite to keep ‘India Shining’ at Gross Domestic Product (GDP) growth of more than 7%, infrastructure development has been accorded key priority for the 11th Five-Year-Plan for the years 2007-2012 and the 12th plan period 2012-2017 with projected investment requirement of $500 billion and $1.5 trillion respectively by the Prime Minister's Committee on Infrastructure.
The interim budget for the financial year 2009-10 announced by the Finance Minister also sets the ground for how the ruling United Progressive Alliance (UPA) will approach the General Elections, announcing that 9% of the country’s GDP will be spent on infrastructure by 2014 (Interim Budget: Continuity Of Growth).
Friday, December 12, 2008
INDIA’S ‘SLOWDOWN’ MAY BE THE WORLD’S ENVY
The world economy may be slowing down to less than 2.5 per cent, but in relative terms the “slowdown” in India would be something the world would envy. Overnight, India has become the second-most powerful engine of global growth, after China.
Even after moderating their GDP growth projections, estimates by economists show that the Indian economy could grow by between 6.3 per cent and 8 per cent, with World Bank and foreign investment banking firms being the pessimists and Indian research organisations and International Monetary Fund the optimists.
India’s economic growth may fall short of Reserve Bank of India’s 7.5-8 per cent forecast. “All indications are that it (GDP forecast) may be revised downwards,” RBI governor D. Subbarao said on Wednesday. He warned 2009-10 could be more painful.
With global trade expected to contract in 2009, the World Bank on Wednesday, in a report titled ‘Global Economic Prospects’, projected that the Indian economy would grow at 5.8 per cent in 2009, down from 6.3 per cent estimated for 2008.
It, however, raised the estimate for 2010 to 7.7 per cent.
“In India, growth slowed across all sectors, with tighter monetary policy, rising inflationary pressures, and mounting fiscal and current account deficits weighing down economic activity,” the report stated.
India’s data keeper, the Centre for Monitoring Indian Economy (CMIE), the most optimistic of the lot, expects the GDP growth to be about 8 per cent for FY 2009. “A combination of these factors (global slowdown, falling commodity prices and falling demand in textiles, automobiles and services) has led to this downward revision,” said Mahesh Vyas, CEO, CMIE.
Commenting on the World Bank projection, Suman K. Bery, director general, National Council of Applied Economic Research -- which has forecast a 7.6 per cent growth -- said, “It implies there’ll be a much steeper recession in the developed countries and global growth will be substantially because of India and China. I think we’ll be fortunate if we’re able to keep a growth rate of 7 per cent for FY 2010, which is unlikely.”
D.K. Joshi, principal economist, CRISIL, said, “We’ve reworked the growth rate to 6.5-7.0 per cent. The economy was already slowing down on account of high interest rates but the global meltdown that came sharply has made matters worse.”
But even these are subject to changing conditions. “Things are very volatile right now and we’ll have to see how they pan out,” said Abheek Barua, chief economist, HDFC Bank, which has forecast a 7.3 per cent growth.
Hindustan Times
The world economy may be slowing down to less than 2.5 per cent, but in relative terms the “slowdown” in India would be something the world would envy. Overnight, India has become the second-most powerful engine of global growth, after China.
Even after moderating their GDP growth projections, estimates by economists show that the Indian economy could grow by between 6.3 per cent and 8 per cent, with World Bank and foreign investment banking firms being the pessimists and Indian research organisations and International Monetary Fund the optimists.
India’s economic growth may fall short of Reserve Bank of India’s 7.5-8 per cent forecast. “All indications are that it (GDP forecast) may be revised downwards,” RBI governor D. Subbarao said on Wednesday. He warned 2009-10 could be more painful.
With global trade expected to contract in 2009, the World Bank on Wednesday, in a report titled ‘Global Economic Prospects’, projected that the Indian economy would grow at 5.8 per cent in 2009, down from 6.3 per cent estimated for 2008.
It, however, raised the estimate for 2010 to 7.7 per cent.
“In India, growth slowed across all sectors, with tighter monetary policy, rising inflationary pressures, and mounting fiscal and current account deficits weighing down economic activity,” the report stated.
India’s data keeper, the Centre for Monitoring Indian Economy (CMIE), the most optimistic of the lot, expects the GDP growth to be about 8 per cent for FY 2009. “A combination of these factors (global slowdown, falling commodity prices and falling demand in textiles, automobiles and services) has led to this downward revision,” said Mahesh Vyas, CEO, CMIE.
Commenting on the World Bank projection, Suman K. Bery, director general, National Council of Applied Economic Research -- which has forecast a 7.6 per cent growth -- said, “It implies there’ll be a much steeper recession in the developed countries and global growth will be substantially because of India and China. I think we’ll be fortunate if we’re able to keep a growth rate of 7 per cent for FY 2010, which is unlikely.”
D.K. Joshi, principal economist, CRISIL, said, “We’ve reworked the growth rate to 6.5-7.0 per cent. The economy was already slowing down on account of high interest rates but the global meltdown that came sharply has made matters worse.”
But even these are subject to changing conditions. “Things are very volatile right now and we’ll have to see how they pan out,” said Abheek Barua, chief economist, HDFC Bank, which has forecast a 7.3 per cent growth.
Hindustan Times
Saturday, November 29, 2008
INDIAN ECONOMY GROWS BY 7.6% IN Q2
Powered by construction and services, the Indian economy notched a reasonable growth rate of 7% in the second quarter of the current fiscal, but analysts said monetary supply should be further eased to prevent the growth from declining in the remaining quarters.
MINT
Powered by construction and services, the Indian economy notched a reasonable growth rate of 7% in the second quarter of the current fiscal, but analysts said monetary supply should be further eased to prevent the growth from declining in the remaining quarters.
MINT
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