India, which started its recent growth bonanza after China, is powering ahead, overtook the UK economy last year in terms of gross domestic product and racing up on Germany. In addition, India has a lot more younger people than China because of the latter country's one-child policy. And in India the benefits of wealth seem to be more widely shared. However, recent investments in the country in the past few years have been falling. The article states that investment in manufacturing fell 15.16% to 5.64 lakh core in 2011-12 from 6.95 lakh core in the previous financial year. As a result, employment in manufacturing also fell by 5 million. However, analysts say the situation will likely improve as the government initiated reforms by opening multi-brand retail to up to 51% FDI, subject to state approvals, hiked FDI in single brand retail, raised diesel prices, and allayed investors’ concern by accepting most of the Parthasarathi committee report on the General Anti-Avoidance Rule (GAAR). Investment by India Inc contracts in 2011-12
After the global crisis of 2008-09, investments by corporates, adjusted for inflation, again declined in 2011-12, albeit not as severe as at the time of financial meltdown. The Reserve Bank of India's tight monetary policy and policy inaction led a fall of 12.79% in capital formation by corporates (private sector) at 7.08 lakh crore from 8.12 lakh crore in the previous year, the latest official data showed. The contraction may be bit decelerated in 2012-13, but only moderately as the government efforts to revive investment came only in the middle of the year which will take time to yield results. Besides, RBI delayed its stance on cutting the repo rate due to heightened infaltion, economists said.
Meanwhile, public sector investment inched up 0.93% at 4.71 lakh crore in 2011-12 from 4.67 lakh crore in the previous financial year, according to the GDP figures released by the Ministry of Statistics and Programme...
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