16.

Improve disclosure standards for mutual Detailed Guidelines have already been issued by
funds and introduce further safeguards to the SEBI to all Mutual Funds .
protect interest of investors.
17. Further strengthening the surveillance Stock watch system has been introduced.
system in the stock exchanges by
implementing the stock watch system in
the stock exchanges.

A] REVIEW OF THE GENERAL ECONOMIC ENVIRONMENT AND THE

INVESTMENT CLIMATE

General Economic Environment

The real GDP growth according to estimates of Central Statistical Organisation (CSO) at 1993-
94 prices, was 4.0 per cent in 2000-01 and 5.4 per cent in 2001-02. Though the growth rate
during 2001-02 marked some recovery over the growth of 2000-01, it remained noticeably lower
than the average growth rate of 6.3 during 1994-1995 to 2000-01. The GDP growth of 5.4 per
cent during the year under review was contributed by agriculture and allied sectors by registering
an increase of 5.7 per cent, services by 6.5 per cent and industry by 3.3 per cent. The services
sector despite the fall in its growth during 2000-01 (7.5 per cent) and 2001-02 (6.5 per cent)
continued to have a share of more than 50 per cent in GDP.

Domestic savings, however, improved marginally from 23.2 per cent of GDP in 1999-2000 to
23.4 per cent in 2000-01. The saving ratio, however, compares unfavourably with the
achievement of 25.1 per cent in 1995-1996. Consequently domestic investment has shown
declining trend from 26.9 per cent in 1995-1996 to 22.7 per cent in 1998-1999. The ratio was
somewhat higher at 24.3 per cent in 1999-2000 but declined marginally to 24.0 per cent in 2000-
01. Sector-wise, the public sector investment improved from 6.6 per cent in 1998-1999 to 7.1 per
cent in 1999-2000 and remained at the same level in 2000-01, but the private sector investment
declined from 16.1 per cent in 1999-2000 to 15.8 per cent in 2000-01. (Table 1.2)