Current State of Indian Economy

Topics: Monetary policy, Gross domestic product, Central bank Pages: 15 (3181 words) Published: March 15, 2010
Research Paper

Current State


Indian Economy

|Contents |

Title Page

1Overall economy and Industrial Growth 2

2Core Infrastructure Industries 2

3 Telecom 3

4Trends in inflation 4

5Monetary indicators 5

6Stock Market trends 5

7Fiscal management 6

8 Foreign trade 8

9 Capital inflows 9

10 Foreign exchange reserves 9

11 Trends in exchange rates 10

Overall economy

The Central Statistical Organization (CSO) released estimates of gross domestic product for the first quarter (April-June) of 2007 shows that GDP growth maintained a level of over 9%. The GDP grew at 9.3% in Q1 2007-08 compared to 9.6% in the corresponding quarter of the previous year. Agriculture sector registered a growth of 3.8%, higher than the increase recorded in the previous year. Industrial growth remains unchanged compared to the first quarter in the last year and slowdown in the growth represented the services sector.

Share of agriculture in GDP fell in the first quarter of 2007-08 compared to corresponding quarter of the last year. Industry and services share inched up during the first quarter of this year, industry accounting for 27.3% and services sector 55% in total GDP.

Industrial Growth

The industrial growth in the first quarter of 2007-08 picked up by 11% compared to 10.5% growth in the corresponding period a year ago. The growth was led by the manufacturing sector which recorded 12% growth in production during the first three month of 2007-08 as against the 11.7 % increase in the corresponding months a year before. The industrial growth was also aided by electricity sector that rose from 5.3% in April-June period of 2006-07 compared to 8.3% in the corresponding period of the present fiscal.

The growth in the basic and capital goods during April- June 2007-08 outpaced the growth registered in the same period of previous year. Basic goods output increased by 9.5 %, and capital goods sector saw its output step-up by 22.5%.

During the three-month period of the current fiscal growth in output of consumer goods surpassed the growth registered in the same period a year before and the increase is attributed to sizable increase in the output of non-durables category.

During the first quarter of 2007-08, 6 industry sectors among the 16 industry sectors were observed to have increased growth compared to the growth registered in the same quarter a year back. These 6 performing sectors include food products, jute, wood products, leather, rubber, plastic, petroleum and coal products and machinery and equipments.

GDP growth ( at 1999-2000 prices )

| |Growth (%) |% Share in GDP | | |2006-07 (Q1) |2007-08 (Q1) |2006-07 ( Q1) |2007-08 (Q1) | |Agriculture |2.8 |3.8 |18.6 |17.7 | |Industry |10.6 |10.6 |27.0 |27.3 | |Services |11.7 |10.6 |54.4 |55.0 |

Source: CSO

Infrastructure industries

There has been an increase in the production index of six core infrastructure industries, however the growth remained subdued (6.9%)...
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