Indian Economy
India is the seventh largest and second most populous country in the world. A new spirit of economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the country and stimulating foreign investment has moved India firmly into the front ranks of the rapidly growing Asia Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. GE Capital terms the Indian Economy unique, PepsiCo finds it one of the fastest growing and Motorola is sure it will turn into a major sourcing center. Indian operations have occupied center stage in these giants' global networks.
India's process of economic reform is firmly rooted in a political consensus that spans her diverse political parties. India's democracy is a known and stable factor, which has taken deep roots over nearly half a century. Importantly, India has no fundamental conflict between its political and economic systems. Its political institutions have fostered an open society with strong collective and individual rights and an environment supportive of free economic enterprise.
India's time-tested institutions offer foreign investors a transparent environment that guarantees the security of their long-term investments. These include a free and vibrant press, a judiciary that can and does overrule the government, a sophisticated legal and accounting system, and a user-friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity. It accounts for over 75 per cent of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations.
Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition.
Economic indicators
The solidity of the Indian economy is evident from its stability in the backdrop of a recessive Asian market. The latest estimates of the Central Statistical Organization (CSO) project Gross Domestic Product (GDP) growth of 5.4 per cent during 2001-02.
India has entered the new millennium with a strong and robust financial outlook. Average annual real GDP accelerated from 5.4 per cent during the 12-year period ending 1991-92 to 6.4 per cent during 1992-1993 through 2000-2001. The overall growth performance of the industrial sector during 2001-02 is expected to be somewhat lower than that of the previous year. However, combined with the continued performance of the services sector, particularly of the information technology sector, the Indian economy is expected to achieve a healthy growth of 6 per cent.
Major macroeconomic indicators:
1990-91 to 2001-02
Key:
India is the seventh largest and second most populous country in the world. A new spirit of economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the country and stimulating foreign investment has moved India firmly into the front ranks of the rapidly growing Asia Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. GE Capital terms the Indian Economy unique, PepsiCo finds it one of the fastest growing and Motorola is sure it will turn into a major sourcing center. Indian operations have occupied center stage in these giants' global networks.
India's time-tested institutions offer foreign investors a transparent environment that guarantees the security of their long-term investments. These include a free and vibrant press, a judiciary that can and does overrule the government, a sophisticated legal and accounting system, and a user-friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity. It accounts for over 75 per cent of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations.
Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition.
Economic indicators
The solidity of the Indian economy is evident from its stability in the backdrop of a recessive Asian market. The latest estimates of the Central Statistical Organization (CSO) project Gross Domestic Product (GDP) growth of 5.4 per cent during 2001-02.
India has entered the new millennium with a strong and robust financial outlook. Average annual real GDP accelerated from 5.4 per cent during the 12-year period ending 1991-92 to 6.4 per cent during 1992-1993 through 2000-2001. The overall growth performance of the industrial sector during 2001-02 is expected to be somewhat lower than that of the previous year. However, combined with the continued performance of the services sector, particularly of the information technology sector, the Indian economy is expected to achieve a healthy growth of 6 per cent.
Major macroeconomic indicators:
1990-91 to 2001-02
| ITEMS | 1990-91 | 1991-92 | 1998-99 | 1999-2000 | 2000-01 | 2001-02 |
| Growth rates (per cent): | ||||||
| GDP at constant factor cost | 5.6 | 1.3 | 6.5 | 6.1P | 4.0Q | 5.4 A |
| GDP at constant factor cost | 8.2 | 0.6 | 4.1 | 6.7 | 5 | 2.3 c |
| Electricity | 7.8 | 8.5 | 6.5 | 7.3 | 4 | 2.7 c |
| Agricultural production | 3.8 | -2 | 7.6 | -0.9 | -6.6P | 6.9 P |
| Foodgrains production | 3.1 | -4.5 | 5.9 | 3 | -6.6P | 6.8 P |
| Exports (BOP in terms of US $) | 9 | -1.1 | -3.9 | 9.5 | 19.6 | 0.6 b |
| Imports (BOP in terms of US $) | 14.4 | -24.5 | -7.1 | 16.5 | 7 | 0.3 b |
| POL | 60 | -11.7 | -21.6 | 97.1 | 24.1 | -14.6 b |
| Food grains production (Million tones) | 176.4 | 168.4 | 203.6 | 209.8 | 195.9P | 209.2 P |
| Electricity generated (million KWH) | 264.3 | 287 | 448.5 | 480.7 | 499.6 | 383.2 c |
| Average exchange rate (Rs./US$) | 17.94 | 24.65 | 42.07 | 43.33 | 45.68 | 47.49 d |
| Growth rate of money supply (M3) | 15.1 | 19.3 | 19.4 | 14.6 | 16.7 | 11.2 e |
| Average rate of inflation (per cent) | ||||||
| In terms of WPI | 12.1 | 13.6 | 5.9 | 3.3 | 7.1 | 4.4 f |
| In terms of CPI | 13.6 | 13.9 | 13.1 | 3.4 | 3.7 | 4.2 g |
| As per cent of GDP at current market prices: | ||||||
| Gross domestic savings | 23.1 | 22 | 21.7 | 23.2 | 23.4 | |
| Gross domestic investment | 26.3 | 22.6 | 22.7 | 24.3 | 24 | |
| Central Government expenditure | 17.3 | 16.2 | 14.7 | 15.4 | 15.3PU | 16.4 BE |
| Central Government receipts | 15.3 | 15.2 | 14.7 | 15.4 | 15.3PU | 16.4 BE |
| Gross fiscal deficit of Central Govt. | 6.6 | 4.7 | 5.1 | 5.4 | 5.5PU | 5.1 BE |
| Exports fob (BOP) | 5.8 | 6.9 | 8.3 | 8.4 | 9.8 | |
| Imports cif (BOP) | 8.8 | 7.9 | 11.5 | 12.4 | 13 | |
| Trade balance | -3 | -1 | -3.2 | -4 | -3.1 | |
| Net invisibles | -0.1 | 0.7 | 2.2 | 3 | 2.6 | |
| Current account balance | -3.1 | -0.3 | -1 | -1.1 | -0.5 | |
| Total capital flows | 2.7 | 1.7 | 1.9 | 2.4 | 1.8 | |
| Total foreign investment net (BOP) | 0.03 | 0.05 | 0.6 | 1.2 | 1 | |
| Foreign direct investment (FDI) net | 0.03 | 0.05 | 0.6 | 0.5 | 0.4 | |
| Portfolio investment | Negl. | Negl. | -0.02 | 0.7 | 0.6 | |
| Parameters for al debt: | ||||||
| al debt/GDP ratio (per cent) | 28.7 | 38.7 | 23.6 | 22.2 | 22.3 | 21 h |
| Debt service ratio (per cent) | 35.3 | 30.2 | 18 | 16.2 | 17.1 | |
| Debt/ exports ratio | 454 | 467 | 283 | 262 | 222 | |
| Short-term debt to total debt ratio (%) | 10.2 | 8.3 | 4.4 | 4 | 3.5 | 2.8 h |
| Foreign exch. reserves (US$ bn.) | 5.8 | 9.2 | 32.5 | 38 | 42.3 | 49.5 * |
| Import cover of foreign exch. | 2.5 | 5.3 | 8.2 | 8.2 | 8.6 | 9.6 |
| Reserves (in no. of months of imports) |
Key:
- A: Advance estimate,
- P: Provisional
- Q: Quick estimate
- PU: Provisional and unaudited (as reported by Controller General of Accounts, Department of Expenditure).
- RE: Revised estimate
- BE: Budget estimate
- Negl. : Negligible
- b: During April-December 2001 (DGCI&S data).
- c: During April-December 2001.
- d: Average for April-January 2001-02.
- e: Annual growth rate as on January 11, 2002.
- f: Average based (April to January 19, 2002).
- g: April-December, 2001 (Average based).
- h: At the end of September 2001.
- *: At the end of January 2002.
- Ratios to GDP at current market prices (base: 1993-94) of National Accounts Statistics released by the Central StatisticalOrganisation.
| Indian Economy | |
