Indian Economy - News & Updates - Archive

[Neo]

India’s central bank bought $12.54bn in Oct​

MUMBAI: India’s central bank bought a record $12.544 billion in intervention in October to slow down a rising rupee, which has gained about 12 percent this year, data on Friday showed.

The Reserve Bank of India (RBI) has bought $64.3 billion in intervention during the first 10 months of 2007, including $11.867 billion in September that was the previous monthly record.

The currency has been boosted by foreign portfolio flows this year of nearly $17 billion, which has propelled the main stock index to a series of record highs.

The inflows have also swelled India’s currency reserves by $96.3 billion this year to $273.5 billion on Nov 30. reuters

Daily Times - Leading News Resource of Pakistan

 

[Bushroda]

India, a Stirring Giant, Is the New Place to See and Be Seen
By HEATHER TIMMONS
NYTimes, New York
December 13, 2007

NEW DELHI — If it’s Monday, it must be Romania — and Finland and Minnesota.

A soaring economy and crumbling trade barriers are making India a “must visit” destination for foreign politicians and executives. The crush of visitors, often first-timers but also companies seeking to expand their existing operations here, lands daily. They all hope to sign deals, find local partners, sell their wares or just soak up the contradictions that characterize the world’s largest democracy, a singular melding of chaos and opportunity.

Bald demographics make India impossible to ignore, and the slowdown in the United States economy adds to its appeal. About half of the country’s 1.1 billion people are under 25, and its rapidly expanding middle class is already estimated to be as large as the entire population of the United States. A rocketing stock market and a fast-growing class of the superrich add to its appeal.

Trade experts compare the rising tide of interest to the wave of outsiders who flooded China a few years ago. This year, Felipe Calderón Hinojosa became the first Mexican head of state to visit India in 22 years. Angela Merkel, the chancellor of Germany, President Luiz Inácio Lula da Silva of Brazil, and Henry M. Paulson Jr., the United States Treasury secretary, have all paid their respects.

But official delegations are arriving from unexpected corners of the globe, too. On a recent typical Monday in New Delhi, the government played host to Minnesotan businessmen led by Gov. Tim Pawlenty, a Romanian delegation led by the senior counselor in the ministry of small and medium-size companies, and Finns led by the minister of trade and development.

Privatization of major industries, a quickly Westernizing, youthful population and the prevalence of English draw a wildly diverse group of prospectors.

On a recent visit to Mumbai, Donald Trump Jr. pledged to invest in real estate there, Jägermeister held parties in New Delhi to introduce consumers to its herbal liquor, Prudential Financial partnered with the Indian real estate giant DLF to create an asset management business and Fiat announced tentative plans to import the Alfa Romeo.

India is like the “proverbial bus in today’s business world,” said Suhel Seth, managing partner with Counselage India, a New Delhi-based branding consultancy. “No one knows where it is going, no one knows whether there is space on it for them — but no one wants to miss that bus.”

Given the vast and varied interest, Indian business leaders can sound overwhelmed. “Iceland is suddenly on our radar screen,” said Supriya Banerji, the deputy director general of the Confederation of Indian Industry, one of the country’s largest trade groups. “Malta is coming in and Cyprus is clamoring for us.” So are Trinidad and Tobago, Uganda, Vietnam, Kazakhstan and Mozambique, all of which have sent delegations.

It is too soon to tell what impact the visits will have economically. They rarely yield immediate results, and sometimes they produce negative reactions. India’s mix of poverty and areas where vast, fetid slums edge newly refurbished international airports and barefoot children beg outside of $500-a-night hotels, has left more than one Western visitor aghast.

The realities of India often surprise even first-time visitors who have studied the country. Signs of social upheaval — strikes, dangerous roads and electricity that flickers off even in the most luxurious hotels — are common. One recent morning in a five-star New Delhi hotel, bleary-eyed Minnesota executives puzzled out a scene from the night before. As they had returned from a visit to the Taj Mahal, thousands of protesters blocked the road, police conspicuously absent. The Americans did not make it back to New Delhi until after midnight.

“We learned a lot,” said Jonathan B. Farber, president of global underwriting for Travelers, the insurance company, picking his words. It was interesting to see “how the logistics worked themselves out,” he said, recalling that as protesters laid down in one lane of the highway, two-way traffic seemed to intuitively share the other lane.

In spite of such hiccups, most visitors are optimistic about India’s future and the opportunities it offers their companies. To date, “trade has been rather modest,” acknowledged Asko Numminen, the Finnish ambassador, tall and blue-eyed, in an understated gray suit that complemented his embassy’s clean Nordic lines. In a nod to his host country, his tie depicted a field of elephants.

In Finland, Mr. Numminen said, “we are speaking about the ‘India phenomena.’” He said companies, universities and research centers were looking toward India because it had the “biggest pool of human resources in the world.” Since the beginning of September, Mr. Numminen has traveled twice to Chennai to open factories for Finnish companies, and Finnair now has 12 direct flights a week from Helsinki to India.

Members of foreign royalty are also making official visits to India — even royalty whose ancestors were involved in colonization of the subcontinent centuries ago. Queen Beatrix of the Netherlands arrived in October, with eight of her country’s most important chief executives, on her second visit to India.

Warner Rootliep, general manager for the Air France-KLM Group in the region, said the trip allowed the executives a “great opportunity to raise some questions directly to the prime minister and other ministers present.”

Showing off a knowledge of India is often de rigueur on the visits. When Gov. Jon Huntsman Jr. of Utah came in October with university administrators and biotechnology executives to pitch business opportunities with Utah, he boasted over lunch with Indian industrialists that he had celebrated Diwali, the most important Hindu festival, at the governor’s mansion back home.

Grinning, he said the relationship between the United States and India had “gone from being flat as a chapati to sweet as gulab jamun,” referring to a flatbread and a local dessert.

Mr. Pawlenty of Minnesota started his speech in New Delhi with “namaste,” the Hindi greeting, though he was quick to address the obvious question: What could a group of Minnesotan and Indian businessmen have in common?

He said Indians tended to like spicy food, while some Minnesotans considered milk spicy, and called the contrasting weather a clear divide. But Mr. Pawlenty noted similarities too: both Minnesota and India broke away from Great Britain, both play forms of hockey, and rural life and farming are a backbone of each.

To be sure, India remains in China’s shadow. Because of weak infrastructure, a fractious political climate and other hurdles, India’s foreign trade and investment figures are dwarfed by China’s, where foreign direct investment was nearly $70 billion in 2006. But many foreign companies and governments increasingly equate the two when they talk about the growth markets of the future.

The government here expects foreign direct investment to grow rapidly next year, to some $30 billion, from $19.5 billion, and the economy to grow at 9 percent for the third year in a row.

And India definitely tops China on one front. Because of increasing business travel demand, American Express predicts, hotel room rates here will increase more than anywhere else in the world in 2008: 34 to 38 percent for midrange hotels and 38 to 41 percent for the best hotels.

 

[Bushroda]

India's Peaceful Rise
Lee Kuan Yew
FORBES, NY
12.24.07, 12:00 AM ET

Even though the economy's annual growth rate has been 8% to 9% for the last five years, India's peaceful rise hasn't led to unease over the country's future. Instead, Americans, Japanese and western Europeans are keen to invest in India, ride on its growth and help develop another heavyweight country.

I recently had the opportunity to visit New Delhi twice. In November JPMorgan Chase (nyse: JPM - news - people ) brought its international advisory board, its European board and its principal officers from many parts of the world to the city for a two-day meeting. And earlier this month Citigroup (nyse: C - news - people ) invited me to speak along with the bank's top leaders at an Asia-Pacific Business Leaders' Summit there. Two of the largest U.S. banks consider India to be a growth story and are eager to service American and Indian companies. I did not detect any anxiety over India becoming a problem to the present world order.

Why has China's peaceful rise, however, raised apprehensions? Is it because India is a democracy in which numerous political forces are constantly at work, making for an internal system of checks and balances? Most probably, yes--especially as India's governments have tended to be made up of large coalitions of 10 to 20 parties.

One example of India's "checks and balances" at work was the suspension of its talks on a U.S. nuclear power deal. Although this deal is manifestly in India's interests, 60 communist MPs--part of the Congress Party-led coalition government--opposed the deal. Subsequently, the Communists allowed negotiations to resume, reserving their position on the outcome. India's development will, from time to time, run into domestic obstruction.

Contrast this with the singleness of purpose in policy and its execution displayed by China's Communist government.

India's navy has an aircraft-carrier force; its air force has the latest Sukhoi and MiG aircraft; its army is among the best trained and equipped in Asia. India can project power across its borders farther and better than China can, yet there is no fear that India has aggressive intentions.

Could this be because India is surrounded by states in turmoil? Pakistan is in crisis; a bad outcome there will increase the terrorist threat to India. As Pervez Musharraf is now an elected civilian president, he won't have the same command over the army he has had as army chief. And any other elected president will have even less sway over the military. Nepal is a deeply divided and troubled country. Sri Lanka is embroiled in an unending civil war, with the Tamil Tigers carrying out endless suicide bombings. India obviously has preoccupations enough to keep its focus fixed on its border regions.

Different Impact

Suppose China were also a democracy with multiple parties and political power bases? Would a multiparty China with a yearly economic growth rate of 9% to 12% be viewed with the same equanimity as India is? Such a China would probably continue to make big strides on the economic, social and military fronts, with more sophisticated capabilities on the ground and sea and in the air and space, and would eventually become a peer competitor, if not an adversary, of the U.S.

The speed of China's change and the thoroughness, energy and drive with which the Chinese have built up their infrastructure and pursued their goals spring from their culture, one that is shared by the Koreans, Japanese and Vietnamese, who adopted the Chinese written script and absorbed Confucian culture. The Chinese are determined to catch up with the U.S., the EU and Japan. Fast-forward 20 to 30 years and the world will have to accommodate a more technologically advanced and economically more sophisticated China, whether under a single- or multiparty system.

India does not pose such a challenge--and won't until it gets its social infrastructure up to First World standards and further liberalizes its economy. Indeed, the U.S., the EU and Japan root for India because they want a better-balanced world, in which India approximates China's weight.

The Indian elite also speak, write and publish in English. They hold a wide range of diverse views--and to the degree that Amartya Sen, a Nobel winner in economics, entitled one of his books The Argumentative Indian. Few Chinese, on the other hand, speak--let alone write in--English, and what they publish in Chinese doesn't always disclose their innermost thoughts.

What if India were well ahead of China? Would Americans and Europeans be rooting for China? I doubt it. They still have a phobia of the "yellow peril," one reinforced by memories of the outrages of the Cultural Revolution and the massacres in Tiananmen Square, not to mention their strong feelings against Chinese government censorship. China will have to live with these hang-ups. To reinforce the idea that theirs will be a peaceful path going forward, the Chinese have rephrased the term "peaceful rise" to "peaceful development." Greater openness and transparency in Chinese society would also help.

Singapore and Southeast Asia (Asean), sandwiched between these two behemoths, need China and India to achieve a balanced relationship, one that allows both to grow and prosper, pulling up the rest of Asia--East, Southeast and South--with them.

Lee Kuan Yew, minister mentor of Singapore; Paul Johnson, eminent British historian and author; Ernesto Zedillo, director, Yale Center for the Study of Globalization, and former president of Mexico, rotate in writing this column.

 

[Bushroda]

Doctors quit dirty NHS for India
Dean Nelson in Delhi and Abul Taher
The Sunday Times, UK
December 16, 2007

THE influx of thousands of Indian doctors into the National Health Service is going into reverse. Hospitals in India are now said to be cleaner and better equipped than many in Britain and doctors are quitting the NHS to work there instead.

The director of one of India’s biggest private hospital chains said he was receiving five job applications a week from NHS doctors and that half his 3,000 consultants were from Britain.

“There’s a feeling that India’s time has come and there’s a huge need for these people to come back,” Anupam Sibal, director of the Apollo hospital in Delhi, said yesterday.

Doctors say they are moving to India because of its economy, state of the art equipment, higher standards than the NHS and a better quality of life. In particular, they say hospitals in India, which many Britons still imagine to be impoverished and dirty, suffer less from hospital-acquired infections such as MRSA.

India has no equivalent of the NHS but there has been a boom in private hospitals that resemble luxury hotels, with marble foyers and corridors mopped by an army of liveried cleaners.

One of those who has made the transition is Mahesh Kul-karni, an orthopaedic surgeon, who left Bristol Royal Infirmary after 10 years in Britain. He is now a consultant at the Aditya Birla Memorial hospital in Pune.

“The hospitals are better than in Britain,” he said. “This hospital is spotless and clean compared with the old hospitals in the UK, some of which are more than 100 years old. I started in January this year and I have not seen MRSA here yet.

“It’s had a lot of investment, and things I couldn’t do in Britain I can do here. We have ‘clean air’ operating theatres [that remove dust from the air], and our intensive care unit here is fully equipped with special monitoring instruments.

“When I went to England 10 years ago, India was 10 years behind Britain. Now there’s hardly any difference.”

Bristol Royal Infirmary defended its record, saying there had been a 35% increase in spending on new equipment and that its latest inspection had found cleanliness was “acceptable”.

Ameet Kishore had worked as an ear, nose and throat consultant in Glasgow Royal Infirmary for 12 years when he moved to the Apollo hospital in Delhi two years ago. Although reluctant to criticise the NHS, which had taught him so much, he said that the new Indian hospitals were cleaner and better resourced.

He contrasted the number of cochlear implant operations that he could perform: at Crosshouse hospital, Kilmarnock, the main ENT centre for the west of Scotland, he was limited to 40 a year; in Delhi he had done 70 in the past six months.

Other doctors cite new European Union rules for their decision to move. Shailendra Magdum, a specialist registrar in neurosurgery at Radcliffe Infirmary in Oxford until he left for India in August last year, said that rules favouring EU doctors over Indians had played a part.

The EU’s working time directive had also lowered NHS standards, he added, by restricting the amount of time that young doctors could spend on the wards.

“For a neurosurgeon to be good you have to spend a lot of time on the wards, but in Britain the working time directive is running down training,” he said.

Although salaries are usually lower in India, doctors are finding that their standard of living is better. Kishore said he lived in a bigger house with a driver, cleaner, cook, nanny and watchman to look after him, his wife and two young children.

 

[Bushroda]

The Other Tiger
India is rising to economically rival China as a destination for inward investment, outsourcing and as a market in its own right. Exec UK investigates.

By Ruari McCallion
Executive, UK

‘The Hitchhiker’s Guide to the Galaxy’ began with an observation about the Universe: that it is really big. That blinding glimpse of the fatuously obvious makes a kind of point that’s relevant to India, too. The distances are vast, the changes dramatic, the contrasts are deep.

The offshore energy fields of the south-east, off Tamil Nadu, and those off Gujarat and Mumbai differ from each other and are a world away from the tea plantations of the north. The chaos and bustle of Delhi and Calcutta contrast with the relative tranquillity of Goa. To talk of ‘India’ as a single entity with a unified range of opportunity is to misunderstand the country.

India is a democracy. China, its neighbour and economic rival, has centralised control over its economy and things happen because the Party wants it to. In India, everyone who has a voice uses it: agreement is necessary before progress happens. That potential weakness – the disparity, argument and need for consensus – can also be a strength. One person who has experienced this is Robert Berkeley, managing director of Express KCS, which provides outsourcing services to publishing houses in the UK, the US and other, primarily English-speaking markets.

“When you land at Beijing, it feels like a western airport. It’s quiet and your progress is smooth. Land at Delhi and you emerge into chaos,” he said. “It’s free-flowing. People leap into any holes they spot and start selling. Delhi airport reflects that [vibrant] culture. If you look, any centralised economic management system will ultimately fail. It can’t govern effectively because it can’t know everything. The Soviet Union tried and failed.”

The chaos that confronts the newcomer into Delhi, Calcutta or anywhere else in India is, then, a manifestation of opportunity. The same could be said of the poor power supplies and inadequate physical infrastructure but one could be forgiven for wishing for a degree of control, so that at least the lights would stay on without recourse to back-up generators and their expensive diesel fuel. Change is happening in India although not as fast as in China – it started later, has progressed more slowly but it’s increasing in pace.

There were false starts and attempts at reform going back decades; some more successful than others. The country can now feed itself, for example. While poverty and hunger persist, the last great Indian famine was in 1967.

Institutions and infrastructure

Economic reform began to look promising in 1980, when Mrs Gandhi made clear her desire to tap into the huge potential represented by NRIs – non-resident investors, Indians and those of Indian descent resident overseas. Restrictions on non-residents investing in private Indian companies had, till then, been total: it simply wasn’t allowed.

The potential was enormous: NRIs’ accumulated savings amount to something over $700 billion. But the process was not smooth. When active outside investors came along, the established families, which had run things pretty much their own way for ages, didn’t like it at all. The issue came to a head when…

To read the full article, click here

 

[Bushroda]

Booming for business
by Alex Dunnin
Canberra City News, Australia

INDIA is on the move and it’s time we started taking it seriously as a global investment partner. But fuelled by its booming economy, stratospheric stock market, surging currency and growing workforce; it’s not just countries such as Australia looking to invest in India, but Indian companies looking to invest in Australia.

The economy is growing four times as fast as ours, the stock market three times, they have more foreign currency reserves and they have a much younger workforce willing to study and work much harder than ours. Little wonder their GDP already matches ours and their stock-market capitalisation is catching up fast.

India’s dramatic transformation is even more remarkable given its socialist past and how it was almost bankrupt just five years ago.

Illustrating the turn-around, the Indian Tata group is odds on to buy the Borders Australia bookstore chain and Tata is joining with Indian private equity groups set to buy the Jaguar and Rover motoring groups from Ford.

No wonder there is a waiting list of entrepreneurs, pension funds and investment managers queuing up to visit the country to do business. With 26 million Indian households earning more than $A55,000 a year, they have a middle class bigger than our entire population and, as their country’s wealth keeps increasing, this number will only grow and keep growing.

Add in India having one of the world’s most competitive education systems (annually producing 100,000 new scientists as well as thousands of other professionals), you can see why India has become such an economic force.

Even scarier for Australia is that India being fuelled by a savings rate approaching 30 per cent in contrast to ours which is less than five per cent.

Residents in major cities such as Mumbai and New Delhi now find their properties worth hundreds of thousands of dollars and, in turn, are pushing property prices skywards and promoting property development as residents become tempted to sell out to harvest the values of their appreciating real estate.

Confidence is even so high that India’s affluent class now have enough confidence in their business and regulatory culture to keep much more of their capital in the country rather than always export it.

India nonetheless needs massive spending on national infrastructure and this is why they are targeting $US 500 billion over the next five years in national spending. Projects already earmarked are highways, railway, ports, aviation and energy.

But with a stock market that has jumped six-fold in four years, the big question is whether its governance mechanisms can absorb the explosive growth and maintain market integrity.

However, these fears may be ill-founded as the Bombay Stock Exchange (BSE) has implemented a range of operational and governance innovations that should make even the Australian Securities Exchange (ASX) take notice.

For example, the BSE was one of the first stock markets in the world to go fully electronic and set up a public-access, web database on company directors, while its "name and shame" policy for companies with significant unresolved complaints is beyond what most developed-world exchanges have introduced.

India is open for business providing massive opportunities for Australian investors to get in on the ground floor.

Alex Dunnin is the director research and editorial at the Rainmaker group. He recently visited India as part of the Australia India Financial Forum.

 

[Neo]

Indian Jet Airways to fly to BD ​

Sunday, December 16, 2007

DHAKA: Indian private airline Jet Airways will fly to the Bangladesh capital Dhaka from Sunday, a company official said on Saturday.

“Dhaka will become the 11th international destination for the airline,” K Datta, Executive Director of Jet Airways, told a news conference in Dhaka.

The airline will operate one daily flight between Dhaka and Kolkata in West Bengal, India and four flights a week between Dhaka and New Delhi, effective from Sunday, Datta said.

The new generation Boeing 737-800 aircraft will be deployed for the new routes.

The airline currently operates a fleet of 75 aircraft, which includes eight Boeing 777-300 ER aircraft and six Airbus A300-200 aircraft.

It also plans to extend its international operations to other cities in North America, Europe, Africa and Asia in phases with the induction of additional wide-body aircraft into its fleet, Datta said.

Indian Jet Airways to fly to BD

 

[Neo]

About 1 in 5 IBM employees now in India​

IBM Corp’s expansion in developing countries shows no sign of relenting. The technology company revealed that it now has 73,000 employees in India, almost a 40 percent leap from last year.

IBM did not provide updated figures for its work force in the US, which has held steady around 125,000 people in recent years. Nor did IBM project its total head count. It had 355,766 employees worldwide at the end of 2006.

If the total has risen by the same rate as in 2006, almost one in five IBM workers now is in India, its second-largest center. Like many other technology providers, IBM has rushed to take advantage of the lower labor costs India offers even for highly skilled workers. IBM’s base in India numbered only 9,000 people in 2003, but it was about 53,000 last year.

IBM has been stressing not only the lower expense of working in India but the potential of the Indian market. IBM executives told visiting Indian journalists last week that the company expected to see revenue from the Indian market jump to nearly $1 billion this year, from $700 million in 2006.

Armonk, NY-based IBM is also ramping up in other key developing markets. Its chairman and chief executive, Sam Palmisano, recently formed a new organisation that will spur IBM’s investment in emerging economies.

The plan is meant to capitalise on the higher growth rates in the so-called ‘BRIC’ countries of Brazil, Russia, India and China. IBM’s revenue from those countries rose 18 percent in the first three quarters of this year, even after discounting the benefit of currency fluctuations. IBM’s total employee count in those countries now is nearly 100,000, up from 70,000 a year ago.

IBM’s vice president of financial management, Jesse J. Greene Jr., would not forecast how much more hiring the company still might do in emerging markets. However, he said “We see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.” ap

Daily Times - Leading News Resource of Pakistan

 

[Contrarian]

IBM is indeed hiring a LOT in India. It has been consistently hiring from most universities in India for the last 2 years.

 

[bd_wonder]

i wonder IF ibm's quality will decline from such massive 'cheap' employment tactics.

 

[Neo]

i wonder IF ibm's quality will decline from such massive 'cheap' employment tactics.

What is your problem dude..???

 

[Neo]

Problem solved!

 

[Neo]

India FDI jumps 65pc in H1; lags behind China ​

Wednesday, December 19, 2007

NEW DELHI: Foreign investment in India jumped 65 per cent in the first half of the fiscal year that began in April compared with a year earlier, the country’s commerce minister said on Tuesday.

Commerce Minister Kamal Nath said India saw 7.2 billion dollars in inflows, retaining its place as the second most attractive foreign investment destination after China, according to a Press Trust of India agency report.

“FDI inflows continue with great momentum,” said Nath. India received a total of 15.7 billion dollars in foreign investment in 2006-2007, more than a 100 per cent increase from a year earlier.

India’s services sector, dominated by the call centre business, saw the biggest investment followed by telecom services and real estate, the report said. Even with increasing investment however, India lags far behind China, which receives at least five times as much foreign investment.

India FDI jumps 65pc in H1; lags behind China

 

[Neo]

India seeks 10pc growth​

NEW DELHI, Dec 19: India aims to achieve 10 per cent economic growth by 2012 but is not immune to a global credit crunch spreading from the United States, Prime Minister Manmohan Singh warned on Wednesday.

“There are some clouds on global financial markets following the subprime lending crisis... We cannot be fully immune to international developments,” Singh told top government policymakers.

The warning was the first by Singh about the fallout on India of the credit turmoil which stems from a default crisis in the US subprime mortgage sector.

The country of 1.1 billion people has been seen by many analysts as a safer investment play than other nations with its still relatively closed economy and fast-growing middle class against a backdrop of overall global weakening.

But Singh said he wanted “to sound a note of caution.” “There are worries the growth of the US and other leading economies may slow down and some may even go into a recession. This may impact both our exports as well as capital flows,” he said, as he sought approval of the government’s new five-year plan -- an economic roadmap targeting 10 per cent growth by 2012.

Liberalisation means “our economy is now increasingly integrated into the global economy with the external sector accounting for almost 40 per cent of the GDP,” he said, referring to such items as external debt and trade.

Singh launched the process of opening up India to foreign investment and trade in the early 1990s when he was finance minister.

But “it is possible with the correct set of policies... we will not only be able to maintain this momentum of high growth into the near future but may be able to raise it to 10 per cent” by 2012, Singh emphasised.

The country needs to achieve double-digit growth to lift tens of millions out of deep poverty, Indian leaders say.

India’s economy has grown by nearly nine per cent annually for the last three years, second only to China, and the boom has drawn a tide of foreign funds that has accelerated since the credit turmoil erupted earlier this year.

Foreign investment in India jumped 65 per cent to $7.2 billion in the first half of the fiscal year to March 2008, figures this week showed, while the stock market has rocketed 45 per cent this year, boosted by overseas funds.

But economists have warned of an economic slowdown in the face of high interest rates, rapid currency appreciation, weakening global demand, rising commodity prices and high global oil costs.—AFP

India seeks 10pc growth -DAWN - Business; December 20, 2007

 

[Neo]

india: Economy seen growing 8.7% ​

MUMBAI: India’s economy is expected to grow at a faster pace than previously expected in 2007/08, but growth is still seen slowing from an 18-year peak of 9.4 percent in 2006/07, a Reuter’s quarterly poll shows. The median forecast in the poll of 10 analysts was for growth of 8.7 percent in the fiscal year to March 31, 2008, stronger than the 8.5 percent forecast in a similar poll in September.

It would also be slightly higher than the central bank’s forecast of 8.5 percent and in line with an average pace of 8.6 percent over the last four fiscal years. Growth was expected to moderate to 8.3 percent in 2008/09. “We are beginning to see a lagged impact of monetary tightening and of course, slowing external demand. This is yet to play out fully, and an appreciating rupee could have an impact on export demand,” said Abheek Barua, chief economist with HDFC Bank. The central bank has raised its main lending rate five times since June 2006, the last increase in March. It has also raised banks’ reserve requirements by 250 basis points over the past year to check price pressures.

Annual inflation, based on wholesale prices, was at 3.75 percent in early December, after hitting a five-year low of 2.97 percent in late October. Inflation, which has moderated from a two-year high of nearly 6.7 percent in January, is forecast at 4.3 percent in 2007/08 and 4.7 percent in 2008/09.

Daily Times - Leading News Resource of Pakistan