India is the growing economy. Foreign Institutional Investors (FIIs) are continuing to pump in huge sums of money into Indian
equities. Among the emerging markets worldwide, India has become top destination for foreign institutional Investors. FIIs are earning huge returns on their investments in India comparing with other countries including China, Mexico and Brazil. Mainly funds from US, Taiwan and Japan are investing in India. However India needs to improve its
infrastructure facilities to attract more FDI. China is ahead in Infrastructure facilities.
The positive factors on the Indian side include large number of young talented working people. It has more resources. But on the negative side about 35% of the people earning less than a dollar per day. About 17 million households in India are classified as “destitute”. The total fiscal deficit of both state and central governments stood at 10% of GDP, which limits spending on infrastructure.
To attract more FDI and to achieve further growth India need to speed up improvements in the infrastructure, as the current improvements are not enough. Despite soaring oil prices, India Inc is posting better results. The
sectors that are likely to post better growth include Power, Textile, Agriculture and Infrastructure. The textile sector is likely to benefit from lifting of trade barriers. Comparing with earlier bull runs, which were dominated earlier by just IT sector and broker related, the current Bull Run is based on strong growing economy. The BSE Sensex is likely to touch 9000 this year. Currently BSE index is hovering around 7500.
Currently Indian Business Capital – Mumbai is flooded with continuous rains for the past few days. Many of the Industries are located in Mumbai. Except the textile sector, which is located in many parts of India, other sectors are badly hit by the monsoon. This may curtail output to some extent in the current year.
Venkateswara Rao M.S.