Latest Facts About Indian Economy

2019 ias preliminary exam test series

India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). According to the Economic Survey 2015-16, the Indian economy will continue to grow more than 7 per cent in 2016-17.

The improvement in India’s economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBI’s inflation focus supported by benign global commodity prices.

India was ranked the highest globally in terms of consumer confidence during October-December quarter of 2015, continuing its earlier trend of being ranked the highest during first three quarters of 2015, as per the global consumer confidence index created by Nielsen.

According to IMF World Economic Outlook Update (January 2016), Indian economy is expected to grow at 7-7.75 per cent during FY 2016-17, despite the uncertainties in the global market. The Economic Survey 2015-16 had forecasted that the Indian economy will growing by more than seven per cent for the third successive year 2016-17 and can start growing at eight per cent or more in next two years.

Foreign direct investment (FDI) in India have increased by 29 per cent during October 2014-December 2015 period post the launch of Make in India campaign, compared to the 15-month period before the launch.

The Nikkei Manufacturing Purchasing Managers’ Index (PMI) for February 2016 was reported at 51.1, indicating expansion in Indian manufacturing activity for a second month in a row, as both domestic and foreign demand increased due to lower prices.

The steps taken by the government in recent times have shown positive results as India’s gross domestic product (GDP) at factor cost at constant (2011-12) prices 2015-16 is Rs 113.5 trillion (US$ 1.668 trillion), as against Rs 105.5 trillion (US$ 1.55 trillion) in 2014-15, registering a growth rate of 7.6 per cent. The economic activities which witnessed significant growth were ‘financing, insurance, real estate and business services’ at 11.5 per cent and ‘trade, hotels, transport, communication services’ at 10.7 per cent.

According to a Goldman Sachs report released in September 2015, India could grow at a potential 8 per cent on average during from fiscal 2016 to 2020 powered by greater access to banking, technology adoption, urbanisation and other structural reforms.

According to The World Bank, India’s per capita income is expected to cross Rs 100,000 (US$ 1,505.4) in FY 2017 from Rs 93,231 (US$ 1,403.5) in FY 2016.

Currently, the manufacturing sector in India contributes over 15 per cent of the GDP. The Government of India, under the Make in India initiative, is trying to give boost to the contribution made by the manufacturing sector and aims to take it up to 25 per cent of the GDP.

Capital Inflows

According to data released by the Reserve Bank of India (RBI), India’s foreign exchange reserves were US$ 354.40 billion in the week up to March 11, 2016, an increase of US$ 2.54 billion over the past week.

Foreign Direct Investments (FDI)

During April 2000–December2015, India received total foreign investment (including equity inflows, re-invested earnings and other capital) worth US$ 408.68 billion. The country was one of the top destinations for FDI inflows from Asian countries, with Mauritius contributing 33.7 per cent, Singapore 15.53 per cent and the UK contributing 8.17 per cent of the total foreign inflows.

Foreign Institutional Investors (FIIs)

FIIs net investments in Indian equities and debt touched record high in last financial year (2014-15), on the back of factors such as expectations of recovering economy, falling interest rates and improving earnings outlook. FIIs invested net US$ 43.5 billion in FY 2014-15 which was their highest investment in any fiscal year so far. Of the total investment, US$ 26.3 billion was invested in debt while the rest US$ 17.2 billion was invested in equities.

Fast Facts:

-The Indian economy is expected to grow at 7.4 per cent in FY 2016-17, as per the forecast by the International Monetary Fund (IMF).

-Foreign direct investment (FDI) inflows have increased 29 per cent during April 2015 – March 2016 to reach US$ 40 billion, as compared to same period last year.

-India’s foreign exchange reserves were US$ 362.687 billion in the week up to July 22, 2016, as compared to US$ 363.351 billion over the past week.

-Mutual Funds asset base of equity funds and Equity Linked Saving Scheme (ELSS) increased to Rs 4.28 trillion (US$ 64.17 billion) as on June 30, 2016.

-India’s Index of Industrial Production (IIP) increased to 1.2 per cent in May 2016, as compared to a decline of -0.8 per cent in April 2016.

-The eight key infrastructure sectors grew at a five-month low of 2.8 per cent in May 2016 as against 8.5 per cent expansion in April 2016, with fertiliser sector exhibiting the maximum growth of 14.8 per cent.

-India continued to remain at the top of Nielsen’s global consumer confidence index for the seventh quarter in a row. The country’s confidence score was 134 in the three months ended March 2016, up by three index points from the last quarter.

-Passenger vehicle sales in June 2016 grew by 2.68 per cent year-on-year to 223,454 units as compared with 6.26 per cent growth and 231,640 units in May 2016. According to Society of Indian Automobile Manufacturers (SIAM), domestic car sales for FY 2015-16 stood at 2,025,479 units as compared to 1,877,706 units in FY 2014-15.

-India’s current account deficit narrowed to US$ 0.3 billion in January-March 2016 quarter, as against US$ 7.1 billion in October-December 2015 quarter. However, it was marginally lower than the US$ 0.7 billion deficit recorded in January-March 2015 quarter.

-India’s Wholesale Price Index (WPI) inflation rate rose to 1.62 per cent in June 2016 as against 0.79 per cent in the previous month.

-India’s Consumer Price Index (CPI) inflation rate rose to 5.77 per cent in June 2016 as compared to 5.76 per cent in May 2016.

-Total Merger and Acquisition (M&A) during January-June 2016 grew by 12 per cent year-on-year to US$ 15.7 billion.

-Total value of Private Equity (PE) investments during January-June 2016 stood at US$ 6.1 billion across 491 transactions.

Current Affairs for IAS Exam