India Revises 2008-09 GDP to 7.1 %
Jan. 29 – Owing to heightened fears of global markets sinking India’s GDP lower, the Indian government released new GDP growth projections for this and the next year. Top government officials said they expect India’s GDP to grow by 7.1 percent this fiscal ending March 31, 2009. Projected growth in the 2009-10 fiscal is expected to increase slightly too to approximately 7 to 7.5 percent. India’s GDP growth was nine percent in 2007-2008, according to official data.
India Inc expects the governement to pump in more money into the economy when they announce their third stimulus package in February. The annual budget, the last budget of the current government is also expected to be highly generous.
Inflation rates have fallen also fallen to an 11 month low, freeing up ample cash to pump into the markets. Over the last few months the Indian government has also drastically cut interest rates, home loan rates and bank rates to boost the economy, domestic consumption and real estate markets. Infrastructure, textiles and small and medium scale units – sectors that have been badly hit will be resuscitated by the government on a priority basis.
While many businesses have been badly affected and some forced to shut shop, economy experts expect these hard times to help entrepreneurs flourish. India has always been a land on inventions and entrepreneurs. The government and large industries are currently implementing policies to tap into this huge resource pool. Many small and medium scale businessmen are also innovatively working together in order to save costs and use equipment efficiently.
Take for example the country’s knotwear hub Tirupur in Tamil Nadu, a group of 40 small exporters has discovered the true meaning of synergy, management jargon usually the preserve of big companies.
The economic Times reported that for years, the units here vied with each other for global clients, but now realize that it’s time to put up an united front. According to a mutual agreement, members of the Tirupur cluster make use of each other’s machinery, and sometimes, distribute orders among themselves.
For those with orders to deliver, this strategy helps to avoid additional costs such as buying new machinery, which could cost them anywhere between Rs 10 lakh (US$20,300) and Rs 20 lakh (US$40,700). And, for those with machinery sitting idle, lending hardware helps to keep the business afloat.