The
Indian economy is expected to grow by 5.9 per cent in 1999-2000. More importanty,
an industrial recovery seems finally to be underway from the cyclical downturn
of the previous two years. Growth of GDP from manufacturing will almost
double to 7 per cent in 1999-2000 from 3.6 per cent in 1998-99. The growth
in GDP from the construction sector is expected to accelerate to 9.0 per
cent in 1999- 2000 from 5.7 per cent in 1998-99. The performance of infrastructure
sectors improved markedly. The inflation rate dropped to international
levels of 2 to 3 per cent for the first time in decades. The balance of
payments survived the twin shocks of the East-Asian crisis and the post-Pokhran
sanctions with a low current account deficit and sufficient capital inflows.
This was demonstrated by the continuing rise in foreign exchange reserves
by over US$ 2.4 billion during the year until the end of January, 2000
coupled with a relatively stable exchange rate. Export performance has
improved on par with the better performing emerging economies. The restoration
of confidence in industry has been best reflected in the rise in the stock
market during 1999. Primary issues have increased by almost half during
the first nine months of 1999-2000.
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