India is blessed in terms of natural resources, skilled labor and a well educated young people with a population of over 1210.2 million people in 2010. The Economy of India is the ninth largest in the world by nominal GDP and the fourth largest by purchasing power parity (PPP). The country's per capita GDP (PPP) is $3,586 (IMF, 129th) in 2010. According to the world bank India’s current growth rate of GDP is 7.8 per cent in the year 2011. India exports were worth 25941 Millions USD in May of 2011. Exports amount to 22% of India’s GDP. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports. India is also leading exporter of textile goods, engineering goods, chemicals, leather manufactures and services. India’s main export partners are European Union, United States, United Arab Emirates and China . India is poor in oil resources and is currently heavily dependent on coal and foreign oil imports for its energy needs. Other imported products are: machinery, gems, fertilizers and chemicals.India reported a trade deficit equivalent to 14965 Millions USD in May of 2011. India GDP Per Capita stands at 718 US dollars and when adjusted by purchasing power parity, stands at 2946 US dollars according to the World Bank. The Government Debt in India was last reported at 69.2 percent of the country´s GDP. [pic]
Figure 1.1GDP of India
Industrial Production in India expanded 5.6 percent in May of 2011. Industrial production measures changes in output for the industrial sector of the economy which includes manufacturing, mining, and utilities The inflation rate in India was last reported at 8.72 percent in May of 2011 The (FEE) or Foreign Exchange Earnings went up to a whopping US$ 12.88 billion during the period January-November 2010 The per capita income of the Indians have risen by 17.9% to Rs 54,835 in the fiscal year 2010-11 from Rs 46,492 in the fiscal year 2009-10, stated the revised government data. The new per capita income figure estimates on the present market prices is over Rs 8,000, which is more than the last projection of Rs 46,492 calculated by the Central Statistical Organization. The per capita income was at Rs 35,917 in fiscal year 2011 as compared to Rs 33,731 in the previous year, said the data on national income. The size of the economy at the present prices surged to Rs 73,06,990 crore in FY11, posting 19.1% rise as compared to Rs 61,33,230 crore in FY10. In a move to stem the rising prices, the Reserve Bank of India (RBI) on 26.07.2011 hiked the short-term indicative policy rate (repo rate) by 50 basis points from 7.5 per cent to 8 per cent with immediate effect. With the hike in repo rate (the rate at which banks borrow from the central bank) the reverse repo rate (the rate at which banks park their funds with the RBI), with a spread of 100 basis points below the repo rate, automatically adjusts to 7 per cent this dampens sectors such as infrastructure and automobile. |Policy rates |Exchange rates |Lending rate | |Bank rate-6% |INR/1USD-44.1553 |Base rate-9.25-10.25% | |Repo rate-8% |INR/IEURO-63.1018 |BPLR-12.75%-19% | |Reverse repo rate-7% |INR/1POUND-72.1034 | |
Table 1.1 Bank interest rates
The RBI has also revised the WPI inflation projection for March 2012 from 6 per cent to 7 per cent. However, it has retained the projection of real GDP growth for the current year at 8 per cent. Crude oil prices remain volatile and are a major risk factor.
2.1 AUTOMOBILE INDUSTRY HISTORY...