The Centre for Monitoring Indian Economy report says “real GDP will grow by 8.8%” in 2011-12.
“Private final consumption expenditure (PFCE) is projected to grow by a healthy 7.5% in the coming fiscal, and gross fixed capital formation by 14.6%. Growing incomes in urban and rural India will drive the robust growth in PFCE,” the report says.
CMIE sees wages and salaries in the corporate sector to rise 14.2%, while inflation at the consumer level is expected to ease to around 7% thanks to cooling food price inflation. This in turn is expected to increase purchasing power of urban consumers.
Rural and semi-urban areas too will see higher incomes with agricultural output pegged at 3-4%, and foodgrain production at “a record 240.8 million tonne. This, coupled with an increase in the prices of agricultural crops, is expected to bring around 10% more income in the hands of the farming community,” the report says.
Another positive mentioned is the linking of NREGS wages to the consumer price index for agriculture, which means that “the purchasing power of at least one-fourth of rural India will remain unaffected” even if inflation rises beyond expectations.
CMIE also sees higher industrial growth. “The six core industries — cement, steel, electricity, coal, crude oil and petroleum products — are expected to show a buoyancy in production in 2011-12. We project that industrial production will grow at around 10%,” the report concludes.
For companies involved in the development of India infrastructure such as materials this report shows the strong projected growth. The core industries are all projecting in the 10% growth range. India and its growth oriented economic opportunities are an exceptional area for investor growth. The most important aspect to seek in this sector are companies who have strong ties with the India political and business communities as well as an exceptional understanding of the cultural issues involved in growing the business opportunities in India. IGC is just such a company. (IGC:AMEX) http://www.indiaglobalcap.com/
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