Home » Latest Headlines » Incredible India, Only If Seen Over 5 Years

Incredible India, Only If Seen Over 5 Years

Share with your friends


The last year has been terrible when it comes to economy news. The stock markets have been weak, the rupee weaker and industry has been complaining hard about political apathy, administrative indifference and policy paralysis.


What if we forget for a moment our obsessions with the last 12 months in specific and see how India stacks up over a slightly longer term, like the last 5 years? IndiaSpend’s Sourjya Bhowmick dips into a ‘Fact Book’ titled, “India, The Incredible Investment Destination” released by the Ministry of Finance in June 2012. And he comes away feeling refreshed and even optimistic. Let’s see if you feel the same.


Incidentally, the Fact Book dwells heavily on the financial and capital markets, where things do look more encouraging. For instance, it shows how India has been amongst the best performing markets in its peer group, since liberalisation, particularly against the Brazil, China, South Africa, Indonesia, Korea and Taiwan.  Moreover, Indian equities have delivered a Compounded Annual Growth Rate (CAGR) of 14% in the last two decades.


India’s Per Capita Income Rockets


It also points out that India’s Per Capita Income has shown the second fastest growth in the world over the last 5 years; after China. Moreover, in this period, industrial production has gone up, so has foreign portfolio investment.


For instance, India had inflows of $90.8 billion, the highest when ranked against Brazil, Taiwan, South Africa, Indonesia and Korea. Now, let’s use the Fact Book to give you a snapshot of the 5 fastest growing economies in the world in the last 5 years;


GDP Growth Over 5 Years


Country Annual Average Growth rate over 2006-2011
China 10.9
India 8.4
Peru 7.2
Argentina 7.1
Indonesia 5.9

Source: India, The Incredible Investment Destination


Despite the fact that global recession hit India for the last 3 years of this period, India has grown at average rate of 8.4%. Of course what might come as news to you is that the next 3 fastest growing economies were Peru, Argentina and Indonesia. A fact of course not lost to any fund manager tracking emerging or frontier markets.


Now, let’s look at some more happy numbers;


Happy Macro Numbers


Key Indicators 2005-2006 2011-12 %change
Real GDP* 32,54,200 5,22,200 60
Real Per Capita GDP 33,548 46,221 38
Investment (as % of GDP) 35.8 37.6 5
Exports 5,15,000 15,15,000 194
General Govt Gross Debt (as %of GDP) 77.4 64.9 16 (-)
FDI Inflow 45,500 2,34,000 414
FDI Outflow 30,500 1,29,000 323
Workers Remittances 1,40,000 3,18,500 127
Gross International Reserves 7,55,000 14,70,000 94

(Rs Crore)

Source: India, The Incredible Investment Destination


As the Table suggests, exports, FDI (inflow + outflow) has increased manifold. The growth in GDP and Per Person GDP is also strong. However, investment as a percentage of GDP has not grown that much. On the other hand, Government Gross Debt has reduced by 16%. Gross debt is expected to come down to 60% by 2015-16, which will be a reduction of 7% from now.


India of course came second behind China on the issue of attracting FDI. But do note that it’s an improvement from its 3rd position in 2010. There are more interesting titbits; all mostly positive. It’s not clear of course whether things will look the same 5 years hence. But then, who waits that long?

Leave a Reply

Your email address will not be published. Required fields are marked *