India Political and Economic Outlook 20102014

India's General Outlook for 2011-2014

. The main sources of this outlook are theEconomist Intelligence Unit (EIU)
andCountry Watch. The following is a general summary of EIU's forecasted
outlook for India through 2014
Despite its lack of a reliable parliamentary majority, the Indian National
Congress-led United Progressive Alliance (UPA) coalition government is
expected to serve a full second term that will run until 2014.
Although the government survived a parliamentary no-confidence vote in
April 2010, a nationwide strike in July against high food and petrol prices
showed that the opposition will continue to make life difficult for the UPA.
The Economist Intelligence Unit expects the government to meet its budget
deficit target of 5.5% of GDP for fiscal year 2010/11 (April-March). Public
expenditure will continue to rise rapidly in 2010-14.
The Reserve Bank of India (RBI, the central bank) will continue to tighten
monetary policy during the remainder of 2010 and in 2011. Monetary policy
will return to a more neutral stance in 2012-14.
Real GDP on an expenditure basis is forecast to expand by 8.4% in 2010/11
and 8.6% in 2011/12, compared with 7.7% in 2009/10. Growth will average
8.7% a year in 2012/13-2014/15.
Consumer price inflation is forecast to slow from 11.7% in 2010 to 6.4% in
2011, owing to the high base in 2010. It will average 5.3% a year in 2012-14.
India

India Fun Facts and Vital Statistics

CultureGrams reports the following fund facts and other vital signs about the
country of India India Fun Facts
Covering 1,269,338 square miles (3,287,590 square kilometers), India is
roughly one-third the size of the United States. India has the second largest
population in the world and is one of the world's most ethnically diverse
countries. The nation is home to several hundred languages, of which 33
have 100,000 or more speakers. India is the birthplace of Buddhism,
Hinduism, Jainism, and Sikhism.
India Vital Statistics
Capital: New Delhi
Current Time: 12:38 AM
Latitude: 28.36
Longitude: 77.12
Population: 1,173,108,018 (rank=2)
Area, sq. mi.: 1,269,219 (rank=7)
Area, sq. km.: 3,287,263

Human Dev. Index rank: 134 of 182 countries

Adjusted for women: 114 of 155 countries
Real GDP per capita: $2,753
Adult literacy rate: 77% (male); 55% (female)
Infant mortality rate: 30 per 1,000 births
Life expectancy: 62 (male); 65 (female)
Currency: Indian rupee
India's History - A Brief Look
In brief sketch about the history and background of India, Country Watch
analysts reported the following:
India is the largest democracy and second most populous country in the
world.
Its history dates back to 2500 B.C.E., when the inhabitants of the Indus River
valley developed an urban culture based on commerce and sustained by
agricultural trade.
Aryan tribes from the northwest infiltrated onto the Indian subcontinent
about 1500 B.C.E., bringing the indigenous beliefs that evolved into
Hinduism, and various empires followed.
Arab incursions starting in the 8th century and Turkic in the 12th were
followed by those of European traders beginning in the late 15th century. By
the 19th century, Britain had assumed political control of virtually all Indian
lands. Nonviolent resistance to British colonialism led by Mohandas Gandhi
brought independence in 1947, and Pakistan was established as a separate
Muslim state because of Muslim-Hindu hostilities.
There have been three wars between India and Pakistan since 1947, two of
them over the disputed territory of Kashmir. A third war between the two
countries in 1971 resulted in East Pakistan becoming the separate nation of
Bangladesh.
India is now one of the fastest growing economies in the world with a large
skilled workforce.
The country has a burgeoning urban middle class and has made great strides
in fields such as information technology. However, India's economic growth

remains constrained by inadequate infrastructure, bureaucracy, labor market

rigidities, and regulatory and foreign investment controls.
About 60 percent of the population is still living close to, or below, the
poverty line.
India Political Outlook for 2010-2014
As reported in the October 2010 Economist Intelligence Unit update, the
Indian National Congress led by the United Progressive Alliance (UPA)
coalition did well to lead a strong economic recovery after the global
recession in 2008-2009. However, they were less than impressive in the
political sphere and because of that fact India's political outlook for 20102014 may be rocky.
While many hoped that the government led by prime minister Manmohan
Singh and UPA coalition would be more effective in the second term (20092014) than in its first (2004-2009), difficulty passing important legislation
demonstrates that the political situation is less than rosy.
Moreover, EIU analysts observed that the rocky political outlook is probably
exacerbated by the fact that the UPA coalition lacks a firm majority in the lower
house of parliament and is in the minority in the upper house.
In April 2010 Singh and his group survived a no confidence vote; however, a
nationwide strike in July 2010 against high food and gas prices demonstrates that
those in power will continue to be challenged by the opposition parties.
According to EIU, in the early part of the forecast period the UPA-led government
will face several substantial and formidable challenges including
Slowing the rate of inflation;
Delivering on its promise of inclusive growth;
Dealing with an escalating Maoist insurgency in eastern and central India;
Making more progress on fighting corruption;
Keeping control over the uprising in Kashmir.
Even though the general public gives credit to Singh and his coalition for the
economic recovery, other fears impacting India's political outlook for 2010-2014
include the concern that instability will mount if the rate of inflation cannot be
brought under control.This was made glaringly clear by the success of the
opposition parties to shut down the country with strikes in July 2010.

During the forecast period, India's political outlook for 2010-2014 will also be
heavily impacted by the burgeoning Maoist movement and continuing problems
with neighboring Pakistan. Subsequently, India faces both domestic and foreign
terrorist threats. However, the EIU analysts commented that India's
democracy seems entrenched and resilient, thus the possibility of political collapse
is lower than in most other Asian countries.
India Economic Outlook for 2010-2014
In light of the fact that prime minister Singh and the UPA coalition survived the no
confidence vote, India's economic outlook for 2010-2014 should remain generally
positive. This means the economic policies for the forecast period will be consistent
with the direction that was pursued in the first five years of Singh's coalition
government which led to steady growth and expansion.
Since the beginning of 2010, the Indian economy surged in activity and that surge is
expected to continue through the forecast period. Accordingly, EIU analysts forecast
that India's real GDP will grow 8.4% in 2010/2011, 8.6% in 2011/2012, and 8.7% per
year in 2012/2013 to 2014/2015. So, India's economic outlook for 2010-2014 seems
to be favorable