Indian Economy in the year 2012-13: An Overview

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

India's economic growth is expected to remain robust in 2012 and 2013, despite likely headwind of double-dip recessions in Europe and the US, according to a United Nations' annual economic report - World Economic Situation and Prospects 2012. The Indian economy is expected to grow between 7.7 per cent and 7.9 per cent this year, as per the report.

India is the second most preferred destination for foreign investors, according to the report 'Doing Business in India' by Ernst & Young. The report explores India's key sectors, investment climate, funding scenario, laws and regulations, to aid companies that are doing, or plan to do business in India.

The wealth of high net worth individuals (HNIs) in India, is set to grow by a compounded annual growth rate (CAGR) of 23 per cent over the next four years and will touch a staggering Rs 249 trillion (US$ 5.05 trillion), highlighted a report by KARVY Private Wealth - the wealth management arm of the financial services firm KARVY Group.

India has emerged as the world's top recipient of officially recorded remittances for the fourth straight year. India is expected to receive US$ 58 billion this year, followed by China, and Mexico, as per the latest issue of the World Bank's Migration and Development Brief.

The Economic Scenario Innovation and efficiency are the keys to boost the growth of exports from the country, according to Mr M Veerappa Moily, Union Minister for Corporate Affairs. He also suggested that there is a need to develop innovation centres at the district levels to boost exports.

• Exports from Special Economic Zones (SEZ) grew by 17 per cent to Rs 260,973 crore (US$ 52.99 billion) during April-December 2011 from Rs 223,132 crore (US$ 45.31 billion) during the corresponding period in the previous year, according to a statement by the Export Promotion Council for Export-oriented Units and SEZs (EPCES)
• The total amount of Foreign Direct Investment (FDI) equity inflows during April 2011- November 2011 stood at US$ 22,835 million, according to the latest data published by Department of Industrial Policy and Promotion (DIPP)
• The Government of India has approved 20 proposals of FDI worth Rs 1,935.24 crore (US$ 392.94 million), according to an official statement. The approvals were given, based on the recommendations of the Foreign Investment Promotion Board (FIPB)
• "India's GDP is expected to grow at 7.7 per cent, which clearly underlines India's potential as an investment destination. The fact that FDI has increased by 31.5 per cent across major sectors further evidences the attractiveness of the Indian economy,” as per Gaurav Karnik, Tax Partner, Ernst & Young
• India's manufacturing sector expanded to 57.9 in December 2011 from 52.8 in November 2011, index rising to a six month high on back of new orders. The HSBC Markit India Manufacturing Purchasing Managers' Index (PMI) increased to 54.2 from 51.0 in November 2010
• Indian employers have emerged as the most optimistic, as far as hiring goes, among 41 countries surveyed by the Manpower Group, a world leader in the workforce solutions
• The revenues from the Indian Media And Entertainment (M&E) industry is expected to reach over US$ 25 billion in the next four years, according to an Ernst & Young report 'Spotlight on India's Entertainment Economy.' Growing digitisation, media consumption and improving demographics are the most important drivers responsible for the growth of this industry
• The Indian handset market witnessed a 14.1 per cent growth in 2011 to touch a total volume of 182 million handsets. The total handset volume is expected to reach 335 million units by 2017, according to ABI Research, a US-based market intelligence company
• Smartphone shipments touched 10 million units in the first eleven months of the calendar year 2011, according to a report titled 'India Monthly Mobile Handsets Market Review', by Cyber-Media Research (CMR). Total 3G phone shipments touched 15.5 million in the first eleven months of 2011, according to CMR analysts, with close to 224 models launched by 26 vendors. Moreover, the multi-SIM mobile handset shipments accounted for 54 per cent of the total India mobile handsets market in November 2011
• In addition, the Indian banking sector is poised to become the world's third-largest in terms of assets over the next 14 years—with its assets poised to touch US$ 28,500 billion by 2025—according to a report titled 'Being five-star in productivity—Roadmap for excellence in Indian banking', prepared for the Indian Banks' Association (IBA) by The Boston Consultancy Group (BCG), IBA and an industry body
• The entire textile and apparel industry in India is expected to grow by 11 per cent to touch Rs 10.32 trillion (US$ 209.5 billion) by 2020. Currently, menswear is the major chunk of the market at 43 per cent, according to Techno-pak Advisors, a retail consultancy. Industry estimates peg the formal suits, jackets and blazers segment at Rs 4,500 crores (US$ 913.71 million)
• Driven by fashion trends, many Indian consumers now spend as much on footwear as on apparels, as they associate variety of shoes to different occasions. The footwear industry in India has almost doubled in the past five years to an estimated Rs 20,000 crores (US$ 4.06 billion)
• The Indian food processing industry is set to triple to reach US$ 900 billion by 2020, provided the key issues are addressed, as per a study by Boston Consulting Group (BCG) and an industry body

World Bank Report

The Indian Economy will grow by 6.9% in this financial year (2012-13) notwithstanding problems like policy uncertainties, fiscal deficit and inflation, the World Bank projected it, while cautioning that developing nations will have to face tougher times. "India will see growth (measured at factor cost) increasing to 6.9, 7.2 and 7.4% in fiscal years 2012-13, 2013-14 and 2014-15, respectively," the World Bank said in the report titled 'Global Economic Prospects' . Referring to developments in 2011, the multi-lateral lending agency said that growth in India was particularly weak due to monetary policy, stalled reforms and electricity shortages. These factors, along with fiscal and inflation concerns, cut into investment activity, it added.