Pradip Kumar Shukla

Report on : 5 golden years of economy and compare with current scenario

The 5-year golden economy & its comparison with the current situation

The period of 2003-08 is considered the golden era of growth for the Indian economy and had raised
the long-term potential, measured in terms of a stable point.

Data Table

Average GDP growth rate 8.8%

Average Inflation rate 5.3%
Average GDP per capita $782.76

Here we have some of the key facts, which shows the growth era of the period:

• There was an overall reduction in nominal and real interest rates, enabling firms to
undertake higher credit for investment and capital formation purposes, the rate which was
one of the highest in the country’s history.
• All three key sectors- agriculture, industry and services contributed to the growth
momentum of the period.
• The period of 2003-08 witnessed a progressive reduction in fiscal deficit.
• The financial sector was also keenly observed to be a well-performing sector, and the period
marked continuous improvements in asset quality and efficiency indicators of the industry.
• Infrastructure investment was stepped up by about 1 per cent.
• 2003-08 Indian economy became second fastest growing economy after China.
• The investment-saving gap rose to 2.3% of GDP by 2008.
• Total private capital inflows rose to a phenomenal level of nearly 10% of GDP by 2007-08,
raised corporate debt sharply, and also contributed to a steep rise in stock and real estate
(asset) prices.
• World Trade dramatically increased by 16.5 % while Indian exports grew by 22%.
• IT sector began growing at 35% per annum.
• Global capital started flowing into India attracted by High interest rates.
• FDI started rolling into India, from. $200 billion in 2003 & increased to $ 600 billion in 2007.
• Overall investment rate is pushed from 27% in 2003 to 36% in 2008, pushing the growth rate
to 9%.
• Both service sector and the manufacturing sector rose at 10 % per annum during the period.
 Different sectors growth rate

Comparison with the current situation:

• Current GDP growth rate of India projected is to be 6.4%.

• Current inflation rate of India projected is to be 5.6%.
• Current GDP per capita of India is $2601.
• These four sectors are expected to outperform in current scenario – IT, Healthcare,
Pharmaceutical & Financial services.
• The fiscal deficit is estimated to be 5.9% of GDP in 2023-24.
• It is expected that Infrastructure investment is going to be grow at CAGR of 8.2%.
• Currently Indian economy is worlds 5th largest economy & it is expected that it is soon going
to become the world leading economy.
• Capital inflows are rising on year-on-year basis.
• Indian exports have increased significantly of 23.69%.
Report on : 10 stocks that performed well and underperformed during crisis

10 stocks in boom economy which will perform well:

• Maruti Suzuki: It’s a stock of Automobile sector. As the economy grows, people get more
money in their hands and they usually go for buying cars as it is a general trend in India. It
has a largest market share in India as well as is the largest producer of cars in India.
• Apollo Hospitals: It’s a stock of Healthcare sector. As the economy grows, there is growth in
disposable income and life expectancy of people grows because of which more elderly
people are seen around. Apart from this their expense on health care also grows.
• HDFC Life: It’s a stock of Financial services (Insurance) sector. As the economy grows,
purchasing parity of people grows and people understand the importance of insurance for
their assets, life and family. Thus, demand of insurance products grows.
• Reliance Industries: It’s a stock of Oil & Gas sector. As the economy grows, demand for
energy resources grow as there are business and new companies are growing.
• IRCTC: It’s a stock of Travel sector. As the economy grows, people get more money in their
hands and they usually go more on vacations. Thus, at that time the most common way of
transportation railways is used to travel.
• Godrej Properties: It’s a stock of Realty sector. As the economy grows, people get more
money in their hands and they usually go for acquiring properties. As at that time more
construction takes place and the price of properties decrease.
• Infosys: It’s a stock of IT sector. As the economy grows, more development takes place in the
field of technology. Thus, IT stocks are expected to perform well in booming economy.
• ICICI Bank: It’s a stock of Bank sector. As the economy grows, interest rates become low.
Thus, economic expansion takes place and consumers and business tend to take more loans
which leads to increased activity of banks.
• Hindalco: It’s a stock of Metal sector. As the economy grows, more construction takes place
and demand for metals increases significantly. Thus, at that time Metal sector is expected to
perform well.
• Titan: It’s a stock of Consumer Durables sector. As the economy grows, people get more
money in their hands and they usually go for acquiring luxury items.

10 stocks in a downward economy which will perform well:

• Hindustan Unilever: It’s a stock of FMCG sector. Even if the economy is in downturn the
demand for consumer staples is never going to get affected much. As these are considered
essential items for people of any economy.
• Cipla: It’s a stock of Pharma sector. Even if the economy is in downturn the demand for
pharmaceuticals/drugs are never going to come down. As it is considered the essential item,
no matter what the economic conditions are, these will always perform well.
• HAL: It’s a stock of Defence sector. Even if the economy is in downturn, the government may
still not want to reduce its expenditure on its defence because its deals with safety of nation.
It’s a sensitive sector.
• Dr Path Labs: It’s a stock of Healthcare sector. Even if the economy is in downturn the
demand for health care services is not going to impacted much because it’s the essential
services.
• TCS: It’s a stock of IT sector. This is the sector which is very less likely to get affected in a
downturn of economy. As IT sector always work for innovation.
• Tata Consumer: It’s a stock of FMCG sector. Even if the economy is in downturn the demand
for consumer staples is never going to get affected much. As these are considered essential
items for people of any economy.
• IGL: It’s a stock of Oil & Gas sector. As we know oil & gas supply is the neckline of any country
to survive. Thus, its demand will not get impacted much in a downturn of economy. Its
always a forward going sector.
• Glenmark Pharmaceuticals: It’s a stock of Pharma sector. Even if the economy is in
downturn the demand for pharmaceuticals/drugs are never going to come down. As it is
considered the essential item, no matter what the economic conditions are, these will always
perform well.
• Max Healthcare: It’s a stock of Healthcare sector. Even if the economy is in downturn the
demand for health care services is not going to impacted much because it’s the essential
services.
• Bharat Dynamics: It’s a stock of Defence sector. Even if the economy is in downturn, the
government may still not want to reduce its expenditure on its defence because its deals
with safety of nation. It’s a sensitive sector.