The Consulate General of India
New York

Indian Economy Update

Dr. Manmohan Singh, Prime Minister, speaking at the inaugural ceremony of the Pravasi Bhartiya Diwas in New Delhi on January 7th 2010, invited the Indian Diaspora to participate in the development of the country of their origin. He expressed confidence that India will return to 9-10 per cent economic growth within a couple of years. He pointed out that Infrastructure, Agriculture, Health and Education were the key priorities for the Government. He said India's economy had fared well, despite the unprecedented global financial crisis and noted that the rapid economic growth over the last few years had helped millions of people to come out of poverty in the country.

Finance Minister Pranab Mukherjee said that the economic growth for the current fiscal year (2009-10) would be 7.75 per cent, higher than previous estimates. Economic growth stood at 7 per cent during the first half of the current fiscal year.

Industrial output grew by 11.7 per cent in August, the highest in two years, raising prospects of a sustained revival in the broader economy. Manufacturing which accounts for 80 per cent of overall industrial output grew by 12.7 per cent. The consumer durables sector grew by a record 37.3 per cent.  Indian exports grew by 18 per cent in November and by 9 per cent in December, thereby ending a 13-month streak of contraction.

Mr. Mukherjee said that high food inflation remained a cause for concern. Wholesale prices-based inflation leaped to 7.31% in December 2009. In December, food inflation stood at 19.17%, whereas food inflation in manufactured items was 26.40%. He said that economic recovery will be a collaborative effort of the Centre and the States. He urged all State governments to cooperate to lift the surplus food stock allotted to them and to utilize their cash surplus for development activities. He also called for efforts to increase farm productivity.