The global economic stability is far from over. But from India’s perspective, there is a little hope of improvement. Even though the stock markets have been on a topsy turvy ride for sometime, the overall progress of India on the economic front is showing signs of improvement.
We take stock of two of the critical numbers which suggest that for the time being, the Indian economy is progressing well
Industrial Output at 13.8% for July
The industrial output has rebounded quite nicely to give the finance ministry hope that a 8.5% growth rate is indeed possible this fiscal. The IIP at 13.8% is almost double of the 7.2% a year ago which suggests that a sure fire progress has happened since last year. A large part of it could be attributed to the fiscal stimulus which has helped industries with the cash flow required to turn things around.
The interesting thing here is that the better than expected IIP numbers would put the planning body in dilemma when it comes to making changes to the fiscal policy. There has been speculation that tighter fiscal policies are needed to curb the rising inflation. With the IIP numbers improving, changes to the fiscal policies might be around the corner
Lets see how the next few months pan out as far as the industrial output is considered
Foreign Exchange Reserves At $285.328 Bn
India’s foreign reserves rose to $285.328 Bn (as on Sep 3) from $282.842 Bn in the previous week.
Rupee also ended at day’s high on Thursday boosted by gains in Asian markets, strong capital inflows and weak dollar overseas.Further, foreign funds have invested a net $13.5 billion in local shares, in addition to last year’s record $17.5 billion investment when the rupee had risen 4.7 percent.
The overall positioning of the financial environmental in India seems to be improving but even then there have not been any signs suggesting a long term permanent healthy state.
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