The speculation of a better performance by the economy in the last quarter of the fiscal year has led Assocham, which is an industrial body, to predict 7.4% growth in the economy. This estimate is a little higher than the rate estimated by the government.

According to the expectations of Assocham, the economy should grow by 8% from January to March in this fiscal year. This expectation is a result of recovery in the exports industry, good economic activities in the manufacturing sector, and intensified measures by domestic industry to utilize its capacity.

Mr. Swati Piramal, the President of Chamber, said, “…the current fiscal will end up with a GDP growth figure of 7.2 per cent to 7.4 per cent.”  From October to December 2009, country’s GDP had dropped to 6% due to fall in the out of agriculture sector. This was a total drop of 1%, since the economy had grew by 7% in the first six months of the fiscal year.

According to the calculations of Central Statistical Organisation, Indian economy will rise by 7.2% in the year 2009-2010. Indian Economy is showing diminishing trends in growth since last fiscal year when it grew by just 6.7%.

It was a result of global recession, since before that Indian economy grew by more than 9% for 3 consecutive years.
According to Assocham, engineering, automobile, heavy engineering, telecom and services are the sectors which are likely to make the most impact on the economic growth. Exports sector is also expected to perform much better in the last quarter of the fiscal year, after getting affected by the global slowdown.

Piramal added that there are indications of better capacity utilization by the domestic industry. She said, “This will further accelerate to provide enough boost for better GDP growth.”

For long India has been wary of its rising population. The population has always been seen as a burden on the already limited resources of the country. Economists always believed that the such a huge population can only be bad for the well being of the economy.

Surprisingly though, the tables seem to have turned. It seems that the large population that India was so embarrassed about has been the largest factor in the economic development of the country. The large population means that the country has more consumers and a larger workforce – all of which contributes to the country’s ever growing GDP.

It is only due to our large population that we have more workers to work in both the industries and the goods and services sectors. Of course, the demand and pressure on resources remains high but then even the returns are high. When the balance between the two is seen, it tips in the favor of growth.

This indeed is good news for India, as what we felt was a liability is in fact a strength.

According to Economist Intelligence Unit (EIU), India is the second largest growing economy after China. But EIU forecasts that India will surpass China as the fasted growing major economy by 2018. And as against the estimation of the Indian government which has projected the Indian economy to grow by 7.2 percent this fiscal, EIU has estimated the growth to be 7.7 percent. The growth for the next five years is estimated to be on the average of eight percent as against the 9 percent in the year 2011-2012 . According to Daniel Franklin executive editor with the Economist, “The GDP will not return back to 9 percent and more as it was during 2005-08. Also the monetary pressure may not go down as expected.”

EIU’s projection is based on the expenditures in the economy while Indian government measures growth on the basis of factor cost. Factor cost is the cost of factors of production used to produce final goods and services. In the current year India’s GDP during the three quarters were at 6.1 percent, 7.9 percent and 6 percent. During 2008-09 the GDP declined to 6.7 due to global financial crises. Due to increasing food prices, India’s wholesale price index rose to 9.89 percent in February 2010 as against 8.56 in January 2010.

The defence sector of India has always been woefully short of funds. While neighbours are strengthening their position along the borders, India is still to prepare itself with requisite infrastructure along the borders that it shares with Pakistan and China.

India is already acknowledged as world’s largest buyer of arms and ammunition and it seems that the funding will only increase now. It is believed that the due to the decision taken on increasing spending on buying of arms and ammunition, foreign arms merchants from all over the world are competing against one another to put a foot in this door.

In the upcoming four day defense exhibition, it is estimated that most of these merchants will be present with their merchandise. Currently, India spends about 2.5 percent of its GDP in buying foreign arms, however, viewing the robust economic growth in India, it is estimated that the spending will soon increase.

Still, the country’s ultimate goal is of self reliance and future policies will encourage manufacturing and testing of arms produced domestically.