Assignment on Is Indian

Growth going to sustain the

Smiling Boom

Submited by Sarath S
Namboodiri
Roll No 05109117
 A Boom in Indian
Economy:whether real &
sustainable
• It is been growing for the last 5 years
• In April 2007 its economy crossed USD 1
trillion and it is the 10th largest economy in
the world
• Indian foreign trade has quadrupled since
2004. 2004 at $105 billion & April 2007 at
$305 billion
• The maximum industrial production at the
best was 7% till 2004. Now it is 14% &
might grow to 18%.
• At present, political governance is only
feasible with coalition government.
Coalition Parties cannot agree on common
program for infrastructural growth,
currently infrastructure investment is below
8% of GDP. Therefore growth in India will
not be uniform
Reasons for growth in India & continue to grow for
the coming years
1) Last few years growth of back office operations and software
development increased the number of middle-class in India.
Which fuelled the internal consumption and it is still growing.

2) This increase in internal consumption helped the well established

Indian industrial companies with surging demands and liquidity

3) Another support came from the Government opening up of Stock

Exchanges to foreign competition. Therefore, Indian owners out
of necessity had to inject equity in their companies in fear of
being bought out by others.
4) With increased liquidity industrial companies which started
growing but not to take head-on competition with China’s
manufacturing. But industrial development of high tech
nature such as intelligent automotive parts and complicated
forgings for industrial production.

5) With 25 million Indians living abroad provided another leg to

India’s growth story. Their 50 billion dollars plus
remittances and investments helped authorities to relax
control on imports in the country. This provided Industrial
companies to upgrade their machinery.
6) Final support came from growth in export based oil refining
capabilities. Located close to Gulf & cheap labour helped
towards a huge surplus of oil refining capacity, thus helping
to subsidise its own oil import bill.