Indian economy

Indian economy has been predicted to grow at a level of 6.9 %.  Growth in the Indian economy has steadily increased since 1979, averaging 5.7% per year in the 23-year growth record.  Many factors are behind this robust performance of the Indian economy in 2004-05. 

High growth rates in Industry & service sector and a benign world economic environment provided a backdrop conducive to the Indian economy.  Another positive feature was that the growth was accompanied by continued maintenance of relative stability of prices.  There is a paramount need to move Indian agriculture beyond its centuries old dependency on monsoon.  This can be achieved by bringing more area under irrigation and by better water management.

  In spite of measures taken to attract Foreign Direct Investment (FDI), the inflow was below expectations in the last five years.  A significant achievement of the economy in the external sector has been the steady and sustained improvement in the balance of payment position.  Another notable development was the decline in the inflation rate during the five years.  

  Value-Added Tax (VAT), one of the most radical reforms to be proposed for the Indian economy, has been approved by 21 Indian States.  Over 120 countries worldwide have introduced VAT over the past three decades and India is amongst the last few to introduce it