Pradip Kumar Shukla

The 5-year golden economy & its comparison with the current situation

The period of 2003-08 is considered the golden era of growth for the Indian economy and had raised
the long-term potential, measured in terms of a stable point.

Data Table

Average GDP growth rate 8.8%

Average Inflation rate 5.3%
Average GDP per capita $782.76

Here we have some of the key facts, which shows the growth era of the period:

• There was an overall reduction in nominal and real interest rates, enabling firms to
undertake higher credit for investment and capital formation purposes, the rate which was
one of the highest in the country’s history.
• All three key sectors- agriculture, industry and services contributed to the growth
momentum of the period.
• The period of 2003-08 witnessed a progressive reduction in fiscal deficit.
• The financial sector was also keenly observed to be a well-performing sector, and the period
marked continuous improvements in asset quality and efficiency indicators of the industry.
• Infrastructure investment was stepped up by about 1 per cent.
• 2003-08 Indian economy became second fastest growing economy after China.
• The investment-saving gap rose to 2.3% of GDP by 2008.
• Total private capital inflows rose to a phenomenal level of nearly 10% of GDP by 2007-08,
raised corporate debt sharply, and also contributed to a steep rise in stock and real estate
(asset) prices.
• World Trade dramatically increased by 16.5 % while Indian exports grew by 22%.
• IT sector began growing at 35% per annum.
• Global capital started flowing into India attracted by High interest rates.
• FDI started rolling into India, from. $200 billion in 2003 & increased to $ 600 billion in 2007.
• Overall investment rate is pushed from 27% in 2003 to 36% in 2008, pushing the growth rate
to 9%.
• Both service sector and the manufacturing sector rose at 10 % per annum during the period.
 Different sectors growth rate

Comparison with the current situation:

• Current GDP growth rate of India projected is to be 6.4%.

• Current inflation rate of India projected is to be 5.6%.
• Current GDP per capita of India is $2601.
• These four sectors are expected to outperform in current scenario – IT, Healthcare,
Pharmaceutical & Financial services.
• The fiscal deficit is estimated to be 5.9% of GDP in 2023-24.
• It is expected that Infrastructure investment is going to be grow at CAGR of 8.2%.
• Currently Indian economy is worlds 5th largest economy & it is expected that it is soon going
to become the world leading economy.
• Capital inflows are rising on year-on-year basis.
• Indian exports have increased significantly of 23.69%.