India's overall economic situation and distribution?

In 2007, affected by the appreciation of the rupee and rising prices, India's economic growth slowed down, with four quarters of year-on-year GDP growth of 9.1%, 9.3%, 8.9% and 8.4% respectively; the economy is expected to grow by 8.9% in 2007-08 (1.4.2007-31.3.2008), with the growth rate dropping by 0.7 percentage points compared with that of the previous year. The main features of economic performance: 1. Investment and consumption is the main force of economic growth. India's economic growth is mainly driven by domestic demand, investment and consumption accounted for more than 90% of GDP. in April-December 2007, the Consumer Goods Production Index grew by 5.8% year-on-year, of which, non-durable consumer goods grew by 8.4%. Investment maintains rapid growth, from April to December, the production index of investment goods increased by 20.2% year-on-year.　　2, the tertiary industry rapid growth. 2007 India's tertiary industry, the main sectors of the growth of more than 10%, 2, 3 and 4 quarters, trade, hotels and communications value-added growth of 11.9%, 11.4% and 11.3%, respectively, the financial, real estate and public transport services value-added growth of 11.1%, 10.7% and 11.6%, respectively.　　3, industrial production growth slowed down. 2007 April-December, the industrial production index rose 9% year-on-year, down 2.2 percentage points over the same period a year earlier, of which the increase in December fell 5.8 percentage points. The manufacturing sector fell more, by 2.6 and 6.1 percentage points respectively. Timber and wood furniture, basic metals, machinery and equipment and chemical products production growth rate is still high.　　4, the price increase rate of high fall. 2007 India prices were high fall momentum, four quarters of the wholesale price index rose 6.4%, 5.3%, 4.1% and 3.4%, respectively, of which rose 6.6% in March, rose 3.1% in October, respectively, is the highest and lowest level in recent years. The current price increases have risen, 11, 12 and January this year rose 3.3%, 3.8% and 3.9%, respectively, year-on-year.　　Second, the outlook for economic development in 2008 Currently, there are two different views on the development trend of the Indian economy in 2008. First, the foreign media that the Indian economy will not be "decoupled" from the U.S. economy, but also by the impact of the recession in Europe and the United States. OECD, UBS have recently said that the Indian economic growth will fall in 2008. The United States Citigroup in the "2008 Asian Economic Outlook," pointed out that India has more than 10% economic growth potential, but the economic structure is unreasonable and the lack of professionals, the formation of long-term obstacles to economic growth, if the global economy worsens, the short-term Indian economy will be at risk. Secondly, India's domestic economic community generally believe that the world economic growth slowdown has no impact on India, the economy can still maintain a rapid growth of 9%. Finance Minister Chidambaram said that in the global economic environment is full of variables, the Indian government will be timely and rapid adjustment of economic policy, to maintain the balance between economic growth and inflation, the government is confident that the economic growth close to 9%. Planning Commission of India, vice chairman of the Motech said that in the financial year 2008-09, India's economy will grow by 9%, and can be sustained for five years. According to a professor of economics at Nehru University, the Indian stock market is expected to continue to rise in 2008 because of the favorable domestic and international outlook for the Indian economy. Indian financial media also generally believe that in 2007, although India's economic growth momentum has weakened, but is still one of the fastest growing countries in the world, and more continuity and stability.　　In order to achieve the 2008-09 economic development goals, the Indian government has set the development of agriculture and manufacturing, encourage the introduction of foreign investment, strengthen infrastructure development and improve financial services priorities. (1) Strengthening rural development, focusing on the development of rural infrastructure, supporting the development of agriculture, increasing the income of farmers, and making agriculture an important engine to drive the economy. The newly announced general budget for the new fiscal year promises to forgive about 500 billion rupees (about 12.8 billion U.S. dollars) of debt owed by farmers to state-owned financial institutions, and the government will also provide 100 billion rupees (about 2.6 billion U.S. dollars) in special funds to help farmers pay off their mortgages, with the two incentives benefiting 4 million farmers. More than 30 other preferential measures have also been proposed, including the construction of hydropower and irrigation channels, subsidizing the cost of purchasing fertilizers and seeds, and building additional rural medical and educational facilities. (2) Vigorously removing obstacles to the introduction of foreign investment and directing the flow of foreign investment to areas that can create more jobs. Recently the government announced its adjusted foreign investment policy, which encourages foreign investment in technologically weak industries, such as allowing 100% foreign investment in titanium mining and aircraft maintenance enterprises, raising the foreign investment limit for cargo and licensed air transport routes from 49% to 74% (the proportion of foreign investment in civil aviation is still maintained at 49%), raising the proportion of foreign investment in government-owned oil and natural gas refineries from 26% to 49%, and permitting financial foreign investment in some areas to 49 percent. However, the policy on the entry of foreign retail giants such as Wal-Mart and Carrefour into India has not yet been relaxed. In addition, it is necessary to strengthen infrastructure, energy construction and financial services; vigorously develop the manufacturing industry, and strive to become a major manufacturing country to solve the increasingly serious employment problem. At present, the Indian economy to pay attention to several hot issues: (a) foreign investment regulation In recent years, foreign investment into India at a rapid pace, in the 2006-07 fiscal year, foreign direct investment totaled 16 billion U.S. dollars, in the 2007-08 fiscal year is expected to reach 26 billion U.S. dollars. 2008-09 fiscal year, the government hopes to more than 30 billion U.S. dollars. India has now replaced the US as the second most popular destination for FDI in the world, after China. This is in addition to a large inflow of speculative capital.　　The entry of foreign capital has led to a great development of some of India's real economy, with the automobile industry becoming the world's fifth largest producer of commercial vehicles and Asia's fourth largest automobile market. 2007 General Motors' automobile production in India was 68% higher than the previous year, and it plans to build a second plant in India in 2008, with sales expected to increase by 10% on the existing basis in 2010. 2007 Mercedes Benz car sales worldwide increased by 22% compared to the previous year. In 2007 Mercedes-Benz cars in the world sales increased by 22% over the previous year, Daimler decided to invest 67 million U.S. dollars to build a plant in India to produce 5,000 Mercedes-Benz cars per year. In addition, Ford plans to invest $ 500 million, Fiat, Suzuki and other manufacturers also have investment intentions.　　The constant influx of foreign capital also brought many problems to India, such as the appreciation of the rupee, stock market risk. 2007 India's stock market is exceptionally hot, stock indexes repeatedly hit record highs. March 5, India's Mumbai Sensitive 30 index closed at 12,415.04, the lowest of the year, December 12 to reach the year's highest point of 20,375.87, up 64.1%. May 29 market capitalization exceeded one trillion U.S. dollars, and became the third market capitalization of more than $10,000 billion after China and Russia. After China and Russia, the third emerging market with a market capitalization of more than one trillion dollars. In the second half of the year, affected by the U.S. subprime mortgage crisis, the stock market experienced four major fluctuations, namely, July 25-August 23, a cumulative decline of 10.2%, October 17-22, a decline of 7.5%, November 1-22, a decline of 6.6%, December 13-19, a decline of 6.3%. In the stock market soared at the same time, the exchange rate has also risen sharply, on October 11, the Indian rupee against the dollar reached 39.27:1, the highest level since February 1998, compared with the beginning of the year the rupee cumulative appreciation of more than 12%. In order to stabilize the stock market, the government wants to take measures to curb the inflow of hot money, but triggered the stock market more violent oscillation. 17 October, due to the Securities and Exchange Commission put forward a ban on the purchase of foreign institutional investors to participate in the voucher class of derivatives after the proposal, the sensitive 30 index once plummeted by 9.2% for the history of the largest single-day decline, foreign capital withdrawal of about 1.7 billion U.S. dollars, the stock market was forced to suspend trading for an hour. On the same day the rupee saw its sharpest fall against the dollar in two months to 39.96:1, and India's finance minister had to urgently step in to calm market sentiment. Despite the failure of the policy, India still said recently that it would steadily promote the opening up of the domestic capital market to the outside world, while strengthening and improving financial supervision to guard against the impact of short-term cross-border capital flows and financial risks.　　(ii) Inflation As a result of the slowdown in US economic growth, many economists believe that the RBI may announce a cut in interest rates at its interest rate meeting on January 29 this year. However, the central bank believes that the current inflationary pressures are a greater threat than the slowdown in economic growth, and therefore continues to keep the benchmark repo rate unchanged at a high level of 7.75%.　　The current upward pressure on inflation comes mainly from rising food and energy prices, as many people in India live below the poverty line, rising food prices have seriously affected their basic livelihood. While the government's price subsidies on commodities such as fuel (there has been no increase in retail fuel prices since June 2006) have played an obvious role in curbing inflation, the upward pressure on prices cannot be ignored, with the wholesale price index rising by 4.11% in the week ending January 26th. And due to fiscal pressures, the Government is likely to reduce fuel subsidies in the future, and the rate of price increases in 2008 is likely to widen.　　(iii) High Interest Rates High interest rates are an unfavorable factor in accelerating the growth of the Indian economy. During the period of rapid economic development, in order to curb inflation, the RBI has raised interest rates for nine consecutive times since October 2004, which has kept the lending rate at a high level and inhibited consumers' willingness to spend. Sales of India's second largest motorcycle company have fallen for 12 consecutive months, dropping 16 percent in January of this year; consumers are buying fewer cars and washing machines, and some are postponing home-buying plans. The phenomenon of slowing loan growth has already appeared, in the 12 months ending in January this year, India's loan volume growth of 22.6%, growth fell back by 7.2 percentage points. Earlier this year India's finance minister called on the RBI to cut interest rates to change the situation of slowing growth in lending and investment, February 11 India's state-owned banks to reduce the preferential lending rate of 25 basis points to 12.5%, Housing Development Finance Corporation, the Indian Mortgage Corporation and a number of other banks have also cut their lending rates, which will be conducive to promoting the expansion of consumption and investment.