India on way to emerging as roaring Asian tiger By Sumeet Chatterjee, Indo-Asian News Service
New Delhi, Oct 19 (IANS) Long decried as a slumbering elephant, India is now striving to emerge as a roaring economic tiger. And helping India realise its dream are the most bountiful monsoon rains in a farm-reliant country, a significant pick up in industry activity, a sharp surge in off-shoring of jobs by overseas companies and a booming stock market, among others. At a time when the world economy is growing at a snail's pace, the prognosis emerging from India has caught the attention of the companies and investors worldwide, who are now all rushing to take part in the action. "Improved agricultural production and strengthening domestic demand have sharply bolstered the Indian economic outlook in the current fiscal year," said Brian Coulton, head (Asia Sovereign Ratings) of global rating major Fitch Limited. "Fitch has revised up its forecast for GDP (gross domestic product) growth in 2003-04 to 6.4 percent from a previous forecast of 5.8 percent made in early 2003," Coulton told IANS in an e-mailed response from Hong Kong. Agrees noted Indian economist D.H. Pai Panandiker. "The kind of optimism that is being seen in the Indian economy today was missing for quite some time now. The feel good factor is back and its back with a bang. "There is a sense of bullishness in the market, in the industry...everywhere. Consumers are also spending more money and purchasing things ranging from houses to cars and mobile phones like never before." "Across India, you can feel a new radiance. The economy is looking up. Industry is upbeat... Prices are stable. Home loans are plentiful. Interest rates are low.... Markets are busy... Job opportunities are improving..." gloats a government advertisement published in major media to time with Prime Minister Atal Bihari Vajpayee's government completing four years in office. It was not long ago that when Indian government agencies projected an eight percent annual economic growth rate, needed to lift a large number of people from acute poverty, as a target everybody knew it would remain so only on paper. Not any longer. Judging by the speed at which economists and independent think tanks are revising up growth estimates, it certainly looks like the country of one billion people is gearing up for better times ahead. India's agriculture-dependent economy grew by a moderate 4.3 percent in the fiscal year ended March 31, 2003, mainly due to a 3.1 percent fall in agriculture produce, as the worst drought in three decades ravaged large parts of the country. More than five decades after the country's independence and all-round technological leaps, the weather god is still the chief provider to Asia's third largest economy where agriculture remains the mainstay for millions. The Indian economy is likely to expand by over seven percent in the current fiscal, boosted by good monsoon rains and a sharp increase in industrial output, say government officials. "The gross domestic product (GDP) growth will be over seven percent this year," said Ashok Lahiri, the finance ministry's chief economic advisor. "At this point of time, I will not be surprised if it touches eight percent. Agriculture is doing well. If you have a bumper harvest the growth rate goes up because of forward and backward linkages," he said. The projected seven percent economic growth figure will be the strongest full-year expansion in the last six years. The last time India's economy grew over seven percent was in 1996-97, when it touched 7.8 percent. Hopes of higher growth rate in the current fiscal year has taken the benchmark share market index to a level not seen in the last three years. The stock market has rallied over 60 percent since touching a six-month low in April. Foreign fund investors have not remained oblivious of the boom in the Indian stock exchange, which has become one of the best performing markets in Asia in the current year. International portfolio investors have poured $3.65 billion into Indian equities till last month this year, up from $763 million last year. Banks are reporting a 30 percent rise in loans to consumers and a 30 percent to 35 percent jump in home mortgages as they shift their focus from corporate loans to the country's growing middle class. These trends have now begun to seep through the wider economy. Car sales, for example, jumped 26 percent for April to August this year compared with the same period last year. Mobile phone users' base has almost doubled from a paltry six million couple of years back to nearly 12 million and is now threatening to exceed the population of fixed-line telephone subscribers. The country has also transformed its image from being an electronics housekeeper to the world to a preferred outsourcing destination for a wide spectrum of industrial sectors-from accounting to medicine to research and development to engineering. Fifteen global car makers, including General Motors, Ford, DaimlerChrysler, Audi, Isuzu and Nissan, have set up design offices in India with a combined budget of $1.5 billion to outsource auto design. "We have a stable external sector, a stable financial regime and a rejuvenated corporate sector ready to take the country into a higher trajectory of growth," says Jayant Bhuyan of the Associated Chambers of Commerce and Industry. --Indo-Asian News Service ########################################################################## # Send submissions for Goanet to [EMAIL PROTECTED] # # PLEASE remember to stay on-topic (related to Goa), and avoid top-posts # # More details on Goanet at http://joingoanet.shorturl.com/ # # Please keep your discussion/tone polite, to reflect respect to others # ##########################################################################
