The Indian economy is set to grow between 7 per cent and 7.5 per cent in the current fiscal, according to Dr C Rangarajan, Chairman of the Prime Minister’s Economic Advisory Council (PMEAC). The mid-year review has projected a growth rate of 7.75 per cent for the fiscal.

India's gross domestic product (GDP) grew by 7.9 per cent during July-September 2009, up from 6.1 per cent in the previous quarter, as per data released by the Central Statistical Organisation (CSO). According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining, manufacturing and electricity, registered growth rates of 9.5 per cent, 9.2 per cent and 7.5 per cent, respectively in Q2 of 2009-10, as compared to the growth rates of 3.8 per cent, 4.9 per cent and 3.2 per cent in these industries in Q2 of 2008-09. The key indicators of construction sector, namely, cement and finished steel registered growth rates of 12.6 per cent and 2.1 per cent, respectively in Q2 of 2009-10, as against the growth rates of 5.2 per cent and 3.8 per cent, respectively in Q2 of 2008-09.

The Economic scenario

Overseas investors have infused US$ 816.69 million into the stock market in the first trading week of 2010, reflecting a positive start for the year after record inflows in the last year. FIIs were net investors of US$ 973.22 million in debt instruments in the first trading week of the year, according to the data released by Securities and Exchange Board of India (SEBI). The wealth of foreign institutional investors (FIIs) in leading Indian companies now stands at more than double the level a year ago, vindicating India’s image of being a safe and lucrative investment destination.

Consumers in India continued to be optimistic slightly more than what they were six months ago, as per a latest MasterCard Worldwide Index of Consumer Confidence survey. "In India consumers are more optimistic than six months ago (68.0) and a year ago (63.9)," said the study. Additionally, India ranks second with 117 points in consumer confidence in the fourth quarter of 2009, according to the Nielsen Global Consumer Confidence survey. The survey results indicate that the recovery from the global economic downturn is faster in India as compared with other countries in the world.

Global ratings firm Moody's has upgraded long-term foreign currency (FC) deposit ratings of 14 Indian banks, including the country's largest bank. State Bank of India (SBI), by one notch to Ba1 from Ba2 with a stable outlook. This reflects a slight improvement in the credit quality of the rated entities. This move has come in wake of the revision in India’s sovereign outlook by the ratings firm. Among the banks which would be benefited by the ratings decision include Axis Bank, Bank of Baroda, Bank of India, Canara Bank, Central Bank of India, Export-Import Bank of India, HDFC Bank, ICICI Bank, IDBI Bank, Oriental Bank of Commerce, Punjab National Bank, State Bank of India, Syndicate Bank and Union Bank of India.

India's local currency rating outlook has been raised to ‘positive' from ‘stable' by Moody's Investors Service on the back of the country's demonstrated resilience to the global crisis and expectation that it will resume its high growth path. The global credit rating major also held out the possibility of upgrade of the local currency bond rating.

Simultaneously, the agency also raised the ceiling on banks' foreign currency deposits to ‘Ba1' from ‘Ba2' to reflect the robust external position of India better. Both ‘Ba1 and ‘Ba2' ratings, according to Moody's definition, fall in the speculative grade category.

Of the more than 200 companies from over 50 countries that form part of the World Economic Forum’s Global Growth Companies (GGC) Community, India today has the second largest representation, with a total of 18 GGCs. Indian GGCs come from every sector, with a strong representation in information technology and electronics, retail, consumer goods and banking.

The GGC Community was formed to engage high-growth companies with the potential to be tomorrow’s industry leaders and drive economic and social change.

India ranks 49 among 133 countries in 2009-10 in the global competitiveness index (GCI) prepared by the World Economic Forum (WEF), an improvement of one position from last year. India’s position is a result of mixed performance across 12 categories covered by the GCI.