Is India finally flying?

India has emerged as the world’s fastest growing economy. Boston Consulting Group’s Global Wealth 2006 study shows in 2005, high growth in India’s (15.9% in local currency terms, compared to China’s 14.8%) assets under management (AUM) – comprising cash, shares, assets in the country and oversaes and money market funds, and excludes wealth attributed to investors’ own businesses, residences or luxury goods. The steady growth, estimated at nearly 16% in 2000-2005, has meant that India’s AUM has more than doubled from $268 billion to $559 billion, helping it move up the ladder from the 27th place to number 19 during the five-year period.

Growth rate is projected to taper off a little – to 13.3% between now and 2010. However, India is seen to be the fastest growing member of the BRIC (Brazil, Russia, India, China) club. The global rate will be 5.6%. India will join the $1 trillion wealth club by 2010, accounting for 1% of the global pie of $115.8 trillion in 2010. Are these figures not inspiring for the entrepreneurs of India?

Arvind Panagariya, presently professor at Columbia University in an article, ‘Is India finally flying?’, has further provided some interesting facts on Indian economy that are all showing a consistency in economic growth.

In the last three years, the economy has grown a phenomenal 19% per annum in current dollars. In 1990-91, the GDP in current dollars was $317 billion. During the last three years, the GDP has increased by $327 billion. To put the matter even more dramatically, given the US inflation rate of 3%, the GDP in real dollars grew at the annual rate of 16% in the last three years. If this momentum can be sustained, the Indian GDP would rise from its current level of $800 billion to cross the current US GDP of $12.5 trillion in just 20 years!

1990-91 exports of $18.1billion took nine years to double. In contrast, the recent doubling has taken place in just three years: from $52.7 billion in 2002-03 to $102.7 billion in 2005-06.

Services exports were multiplied by a factor of 3.7 in just five years between 2000-01 and 2005-06, whereas during ten years between 1990-91 and 2000-2001 it were multiplied by 3.5.

The ratio of goods and services exports to GDP rose from 11.6% in 1999-00 to 15.6% in 2002-03 and to 20.5% in 2005-06.

The total foreign investment flow has risen from $6 billion in 2002-03 to $20 billion in 2005-06.

Remittances from abroad have risen less dramatically. But they too have gone up from $17 billion in 2002-03 to $25 billion in 2005-06.

In 1990-91, India had just five million telephone lines in total. Currently, telephone lines are expanding at the rate of more than five million per month. In urban areas, teledensity has reached 31%. Teledensity in the rural areas at 2% remains low. But to put the matter in perspective, as recently as 1991, urban teledensity was below this figure. The communication sector as a whole has been growing 24% per year in real terms since 1999-00. Its share in the GDP has more than doubled from 1.6% in 1999-00 to 3.5% in 2004-05.

The sales of passenger vehicles have risen from 707,000 in 2002-03 to 1.14 million in 2005-06. The total turnover of the automobile industry rose from $12.3 billion in 2002-03 to $19 billion in 2004-05.

Many sectors are doing tremendously well. We can see hope all around. And no sane Indian is sceptical about an honourable tomorrow for India. Let us work a little harder and be honest to our work; ‘Yogah Karamshu Kaushalam.’

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