According to the Chief economic advisor, Arvind Virmani, the current global financial turmoil will have a minimal direct impact on India’s economy which is likely to continue to grow at the projected rate of around 8 per cent in 2008-09 and 9 per cent in 2009-10. Looking at some finance and economy indicators, we find that in 2007-08, India's foreign direct investment (FDI) touched US$ 25 billion, up 56 per cent against US$ 15.7 billion in 2006-07, and the country's foreign exchange reserves had crossed US$ 341 billion as on May 21, 2008. Minister of State for Commerce and Industry, Mr. Ashwani Kumar, said that the Indian economy will maintain an 8-per cent growth rate over the next decade, owing to strong fundamentals of the economy which will attract greater investments in the manufacturing and services sectors. India’s economy seems stable.
Apart from the positive indicators on finance and economy, another positive sign is the rising number of high-net-worth-individuals or millionaires in India. At the end of 2007, India had about 123,000 millionaires, up 22.7 per cent from a year earlier, according to the third annual Asia-Pacific Wealth Report published by Merrill Lynch and Capgemini.
Banking, financial services and insurance (BFSI) comprised 38 per cent of the outsourcing industry in India (worth $47.8 billion in 2007). Most of the work outsourced comes from the US followed by Europe. Financial services companies in India are growing, as are financial services jobs. “Except for China, the India macro story is the biggest opportunity for financial services companies. A young population, growing incomes, low penetration, all embody the best opportunity for India," said Ajay Bagga, CEO, Lotus India AMC. Companies marketing financial services, such as French financial services group, Societe Generale, said it would more than double the headcount at its Global Solution Centre in Bangalore and invest about Euro 5 million to develop a new campus. Financial service company, J P Morgan Chase & Co, is likely to double private equity investments to US$ 1 billion, according to Kalpana Morparia, CEO of its India operations.
Besides this, many Indian firms are targeting overseas financial services business. Reliance-ADAG is picking up 26 per cent stake with management control in a financial services company in Saudi Arabia. Overall, the finance indicators for the Indian economy seem positive.
| | Author Info: Smith is a business journalist who writes articles on the economy for various websites. His articles are well-researched and analyzed. |
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