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Indian Economy Overview

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Indian Economy Overview

May, 2012

India is projected to see a faster growth of 7.5 per cent this fiscal, on the back of higher savings and investment rates, even as most of the Asia-Pacific economies are likely to expand at a slower pace, as per a United Nations (UN) report. "We expect it to expand by about 7.5 per cent in 2012-13," said Nagesh Kumar, Chief Economist, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

"Today India is among the most attractive destinations globally, for investments and business and FDI had increased over the last few years," according to Ms Pratibha Patil, President of India. The Indian economy has continuously recorded high growth rates and become an attractive destination for investments, highlighted Ms Patil.

Meanwhile, India continued its ascent as a top destination for private clean energy investment, according to a research report released by The Pew Charitable Trusts. "Clean energy investment, excluding research and development, has grown by 600 per cent since 2004," according to Phyllis Cuttino, Director, Pew's Clean Energy Program. India's clean energy sector continued to flourish in 2011, with private investment increasing 54 per cent to US$ 10.2 billion, placing the country at sixth position among the G-20 nations. This was the second highest growth rate among the G-20 nations.

The World Economic Forum (WEF) plans to establish permanent physical presence in India by setting up an office in the next twelve months. "Today, India is amongst the most important G-20 economies and this underscores Forum's commitment to the country as a partner," according to Mr Sushant Palakurthi Rao, Senior Director, WEF.

The Economic Scenario

  • Tata Consultancy Services (TCS) has been named as the world's fourth most valuable information technology (IT) services brand by leading global brand valuation company, Brand Finance. "With a strong brand strategy and a refined sponsorship portfolio, TCS has been able to improve both brand awareness and its profile globally," as per David Haigh, Chief Executive Officer and Founder, Brand Finance
  • The Union Ministry of Science and Technology has selected three consortia that will receive a grant of Rs 125 crore (US$ 23.58 million) from the Centre. The funding will be over five years, under the Indo-US Joint Clean Energy Research and Development Centre. The Joint Clean Energy is part of the US-India Partnership to Advance Clean Energy, announced by the Indian Prime Minister, Dr Manmohan Singh, and the US President, Mr Barack Obama, in November 2011, which aims to accelerate the transition to high performing, low emissions, and energy secure economies
  • Non-resident Indians (NRIs) deposited US$ 11 billion into bank deposits during 2011-12, three times more than in the previous year, according to data released by the Reserve Bank of India (RBI). The highest accretion was in the non-resident (external) rupee account, at US$ 7.46 billion, against an outflow of US$ 280 million in 2010-11
  • The Government of India has approved 14 Foreign Direct Investment (FDI) proposals amounting to US$ 288.05 million, based on the recommendations of Foreign Investment Promotion Board (FIPB)
  • India's foreign exchange (Forex) reserves increased by US$ 1.4 billion in the week ended April 20, 2012, according to data released by the RBI. The reserves have increased US$ 205 million since the start of this financial year
  • FDI inflows worth US$ 341.49 million were recorded in the drugs and pharmaceuticals sector between April 2009 to February 2012. At present, the Government of India allows 100 per cent FDI for both greenfield and existing projects in the sector, according to Mr Jyotiraditya Scindia, Minister of State for Commerce and Industry
  • India is the global leader in the IT-business process outsourcing (BPO) industry with half of the world's back office being located here. Indian outsourcing revenue at US$ 59 billion for 2011, accounts for 51 per cent of the global offshore market share, as per a report by Tholons Research. The total direct employment by Indian IT-BPO sector (as of 2011) was 1.98 million and indirect employment was 7.5 million