The growth of India’s economy may possibly improve and repeat its 2008-09 performance of around 7.0% in the current fiscal if the US economy bottoms out by September 2009 and there is normal monsoon. India's gross domestic product (GDP) growth could be as little as 6.25% if there are impediments in the US revival, the report said.
A large domestic market, resilient banking system and a policy of gradual liberalisation of capital account have been some of the key factors for the Indian economy, however, a major concern at this stage though not entirely unexpected is a sharp dip in the growth of private consumption, the report said.
Four factors seem to have contributed to this slowdown, first, it could have been due to the wealth effect, resulting in slump in the equity and property prices and secondly, the uncertainty in the labour market. Similarly, cutbacks in consumer credit by private banks, non-banking finance companies (NBFCs) and other lenders and finally, during the slowdown a dominance of precautionary motive may have induced consumer to either put back their spending decisions or shift towards unbranded alternatives.
Flexibility in the policy framework and initiatives taken so far provides background for resumption and sustained high growth path, the report added. Indian economy which is Asia’s third biggest economy grew by 6.7% during 2008-09—the slowest pace since 2003. This was largely due to a global credit crunch followed by the recession. India's GDP grew by an average 9% in three of the past four fiscal years. Domestic industry has witnessed signs of upturn during the last fiscal, according to the Economic Survey’s annual economic report card.
“Indian industry had to weather severe economic shocks but now it is moving toward recovery,” according to the report.
— Economic growth decelerated to 6.7% in 2008-09 compared to 9% in 2007-08 and 9.7% in 2006-07.
— Per capita growth is at 4.6%.
— Deceleration in growth was witnessed across all sectors except for mining and quarrying; agriculture growth fell from 4.9% in 2007-08 to 1.6% in 2008-09.
— Manufacturing grew at 2.4%, slowdown was ascribed for the decline in exports and domestic demand.
— Global financial meltdown in developed economics was a major factor in India’s economic slowdown.
— Investment remained relatively buoyant, ratio of fixed investment to GDP increased to 32.2% in 2008-09 compared to 31.6% in 2007-08.
— Fiscal deficit to GDP ratio stands at 6.2%.
— Credit growth declined in the later part of 2008-09 reflecting slowdown in general and the industrial sector in particular.
— Increased plan expenditure, reduction in indirect taxes, sector specific measures for textile, housing, infrastructure through stimulus packages provided support to the real economy.
— Merchandise export grew at a modest 3.6% (in US Dollar terms) while the overall import growth is pegged at 14.4%.
— A large domestic market, resilient banking system and a policy of gradual liberalisation of capital account helped in mitigating the adverse effect of global financial crisis and recession quite early.
— Sharp dip in growth of private consumption is a major concern at this stage.
— Medium to long-term capital flows likely to be lower as long as the de-averaging process continues in the US economy.
— Revisiting the agenda of pending economic reforms is imperative to stimulate the growth momentum. –Yogesh Sapkale [email protected]
Deliveries will begin from July and the first 100,000 deliveries are expected to be completed by the last quarter of 2010, the company said. Tata Motors also reconfirmed that the first 100,000 owners are price-protected, and will get their Tata Nano at the ex-showroom prices.
Tata Motors, the country’s largest vehicles maker also said it is making all efforts to deliver the Nano earlier than schedule by ramping up production at the already operational Pantnagar plant and the fast upcoming Sanand plant.
The booking process had also given the option to applicants to indicate whether they would like to retain their booking amounts with the company, even if they do not get selected among the first 100,000 allottees, and await delivery of their cars after them.
The company said 137,867 or about 67% applicants had chosen this option, from which a further 55,021 retainees have been made allotments. The booking amounts of the unsuccessful applicants, who had not exercised this option, would be returned, it added.
Tata Motors said although it will inform all the applicants about their current status, the applicant can also check it on the company website www.tatanano.com , using their booking application number or calling Tata Motors call center on 020-66495678.
The deliveries to the 55,021 retainees will begin after the first 100,000 deliveries. The retainees will also benefit from an interest of 8.5% on their booking amount if the car is delivered within two years from the date of allotment (23rd June 2009) and 8.75% if the car is delivered after two years from the date of allotment, it added.
Tata Motors, along with the confirmatory letter, is also making an offer to retainees on its Indica range over and above any current scheme on these cars in the market, in addition to discount vouchers of Titan and Westside which can be used at any outlet of these companies across India. Unsuccessful applicants will also be given the same offer, the company said.