Indian Economy Overview

Last Updated: August 2011

The overall growth oI gross domestic product (GDP) at Iactor cost at constant prices, as per Advance Estimates was 8.5 per cent in 2010-
11, representing an increase Irom the revised growth oI 8 per cent during 2009-10, according to the monthly economic report released Ior
the month oI July 2011 by the Ministry oI Finance. The index oI industrial production (IIP) rose to 8.8 per cent in June 2011, year-on-year
(y-o-y), on back oI manuIacturing and within that, the capital goods sub-segment. During April-June 2011-12, the IIP growth was
registered at 6.8 per cent as compared to 9.6 per cent during 2010-11.
eight core inIrastructure industries grew by 5.2 per cent in June 2011 as compared to the growth oI 4.4 per cent in June 2010. In addition,
exports in terms oI US dollar, increased by 46.4 per cent during June 2011. On the back oI such Iacts, India`s GDP is projected to continue to
grow at a brisk pace oI 8.8 per cent in 2011-12.
In addition, India has entered the club oI top 20 exporters oI goods and reclaimed its position among top 10 services exporters in 2010.
India's goods exports rose by 31 per cent in 2010, helping it to improve its world ranking moving up two places to 20 Irom 22 in 2009.
Furthermore, the number oI millionaire households in India will grow Irom 2,86,000 to 6,94,000 between 2011-2020, at a growth rate oI
143 per cent, as per a study by the Deloitte Center Ior Financial Services. Among emerging markets, India is likely to have the highest per
capita wealth among millionaires with US$ 4.25 million placing it ahead oI the US. In comparison to other BRIC (Brazil, Russia, India
and China) nations, India is likely to experience the largest growth at 405 per cent in total wealth held by the millionaires.
The Economic Scenario
India has been ranked at the second place in global Ioreign direct investments (FDI) in 2010 and is expected to remain among the top Iive
attractive destinations Ior international investors during 2010-12, according to a report on world investment prospects titled, 'World
Investment Prospects Survey 2009-2012' by the United Nations ConIerence on Trade and Development (UNCTAD).
India's FDI gathered momentum with the inIlows growing by 310 per cent in June 2011 to touch US$ 5.65 billion. It is the highest
monthly inIlow during the last 11 years. The total FDI stood at US$ 16.83 billion during January-June 2011, nearly 57 per cent higher than
the US$ 10.74 billion received during the same period last year.
Non-resident Indian (NRI) inIlows in the Iirst quarter oI 2011-12 has witnessed a rise oI 38 per cent as compared to the same period in
2010-11. NRIs invested US$ 1.54 billion in various NRI deposit schemes during April-June 2011.
Private equity (PE) investments in India stood at US$ 6.14 billion in value terms, while the number oI deals increased by 33 per cent to
195, during January-June 2011, according to data compiled by Chennai-based Venture Intelligence. The rise in the value oI the deals so Iar
(June 2011) recorded a growth oI 52 per cent, as compared to US$ 4.04 billion raised during 2010.
India's Ioreign exchange (Forex) reserves have increased by US$ 1.6 billion to register US$ 318 billion during the week ended August 19,
2011, according to data released by the Reserve Bank oI India (RBI). The increase in Forex is largely attributed due to valuation changes.
The Government has approved Iund raising worth Rs 60,950 crore (US$ 13.24 billion) by companies through external commercial
borrowings (ECB) or Ioreign currency convertible bonds (FCCB) Ior inIrastructure projects in the Iinancial years 2009-2011.
India's merchandise exports have registered an increase oI nearly 82 per cent during July 2011 Irom a year ago to touch US$ 29.3 billion,
according to a release by the Ministry oI Commerce and Industry. Exports during April-July 2011 reached US$ 108.3 billion, up 54 per
cent over the same period a year ago, according to Mr Rahul Khullar, Commerce Secretary. Exports in the reIerred period increased on
back oI demand Ior engineering and petroleum products, gems and jewellery and readymade garments

CredlL crunch