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Current Date:
Thursday, July 29, 2010
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| INDIA's ECONOMY |
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The Indian economy has continued to sustain its growth momentum with the first quarter growth in the current year being a robust 8.9 percent. While long term growth during 1998-2004 has averaged 5.9 per cent, the most recent three years (2003-2006) witnessed an average growth of over 8per cent. Inflation during this period remained moderate and inflationary
expectations were generally contained. Average long-term inflation in the last decade was a moderate 4.9 per cent. |
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| There has been a virtuous and structural shift in the economy with services sector improving its share in GDP from 41 per cent in 1990-91 to 54per cent in 2005-06. The share of agriculture in GDP declined from 32 percent in 1990-91 to under 20 per cent in 2005-06. |
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There have been signs of industrial resurgence. Industrial growth has been both broad-based and generally balanced. In the last 29 months, from April 2004 to August 2006, the average year-on-year growth in capital and consumer goods segment of industry have been 51.39 per cent and 29.58 per cent respectively, clearly demonstrating that growth has been driven by both
investment and consumption. Manufacturing sector has continued to display buoyancy with annual growth averaging 9.6 per cent since April 2004. This buoyancy has been further strengthened with growth further accelerating to 11.8 per cent in April-August 2006. |
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| Industrial performance had a mixed but diversified bag of strengths – local resources, skilled labour, technology and innovation. The policies of continued economic liberalization pursued during the period since 1991 has had a powerful effect on the industrial resurgence. It has not only changed the mindset of the entrepreneurs, but also made them conscious of maintaining a competitive edge in terms of prices, quality and consumer preferences. It has also improved productivity of firms by providing access to technology, intermediate inputs and capital goods. |
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The exchange rate of the rupee against the US dollar has displayed reasonable stability during 2004-05 and 2005-06. After depreciating during the first five months of the current financial year, the rupee started strengthening against the US Dollar from the month of September, 2006. At
the same time, however, rupee has been weakening against the Euro and Pound Sterling, but strengthening against Japanese Yen. |
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External Trade, India’s merchandise exports have exhibited sustained buoyancy since 2004-05. Exports recorded a growth of 26 per cent during 2004-05 and 25 per cent during 2005-06 with exports reaching the $100 billion mark. According to provisional data released by DGCI&S, exports recorded a growth of 23 per cent in US dollar terms during the period April–September 2006. It is
expected that exports would touch a level of US$126 billion by the end of this year which is nearly double the level of exports achieved in 2003-04. India’s share in world merchandise exports which was 0.8 per cent in 2004 has increased to 0.9 per cent in 2005. Given the recent buoyancy in India’s exports, India’s share of exports in the world merchandise exports is expected to increase further. Import growth, according to DGCI&S’ provisional data was 19 per cent in April—September 2006. Non-oil imports grew by 11 per cent. The low growth in non-oil imports is mainly due to lower gold imports. Capital goods production in the domestic economy also increased by 19.9 per cent in April-July, 2006-07. |
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