INDIAN ECONOMY A SNAPSHOT

India A nation of many countries !

Population 1.1 Billion 64.5 mn in 7 Metros
16 official languages,5 religions Population growth 1.4%

Young pop.: 54% under 25Y 550 Mm.

Literacy rate: 64.8 % (Ever increasing)

27 states,6 union territories 31% urban women are in work force

Over300 million Mobile users (Growing rapidly)

Area : 3,300,000 Sq. km

INDIAN ECONOMY Effect of Recession

One of the fastest growing economy after China. Annual growth rate (GDP)of 9% in 2007-08. Recession all over the world decelerated Indias GDP growth in 2008-09 to 6.30%. Agricultural growth slowed down to 3% due to bad mansoon though its impact on GDP (Contribution-18%)is minimal. IIP was lower in 2008-09 Exports growth decelerated for last 10 months. No bank failures compared to several all over the world

Going forward
Growth

expected to be at 7% in 2009-10 and will be 8% in 2010-11. IIP will be over 6% in 2009-10 Rural demand will sustain in 2009-10 Recession effect lower in India due to less dependency on Exports RBI has effectively monitored financial markets, liquidity and interest rates. Domestic consumption which is 57% of GDP holds the key to Indias turnaround.

Recovery?
India is recovering from the global recession impact Q3 of year 2009-10 will see a rebound and all sectors expected to regain growth Services sector which contributes over 52% of GDP will contribute substantially to its growth. Huge Government spending on Infrastructure projects- nearly $559 bn in 11th plan - will boost demand. Governments support with stimulus packages is working Auto ,cement and steel industry are showing signs of recovery

Recovery?
Financial markets recovered over 100% in last two quarters. Fund flows from FIIs accelerated in last two quarters -a sign of return of confidence in India Inflows touches 30 bn in first two quarters of 2009-10- a growth of 65% YOY Forex reserves at $253bn- A comfortable sign Exports to touch $200 bn in 2009-10 Trade deficit narrows due to sharper drop in Imports

Way forward
Boost to Infrastructure through Govt spending Projects in public private partnership to accelerate investment in infrastructure spending Financial markets recover from years lows Financial system strong in India Demand for FMCG continue to be strong at a growth rate of 20% India will be back to double digit growth rate

Concerns
Lower

demand for commodities and its dependent manufactured products Lower agricultural growth due to bad monsoon Increase in food prices and its effect on Inflation Prolonged world recession Deceleration in Export growth