India's GDP projected at $902 bn
Thursday, 11 January 2007, 18:30 IST
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New Delhi:India's net inflow of foreign direct investment during this fiscal will top $9 billion while its gross domestic product will expand to $902 billion, says the Prime Minister's Economic Advisory Council. "A heartening feature in the balance of payments outlook is that for the first time in several years, net foreign direct investment is projected to be larger than portfolio capital flow," the council said in a presentation. "The net figure results from inbound foreign direct investment (FDI) of around $12 billion and outbound FDI of $3 billion," said the council in the presentation on India's balance of payments to Prime Minister Manmohan Singh. The inflow of portfolio investment has been projected at $7 billion, as against $12.5 billion in the previous fiscal and $8.9 billion in 2004-05. The inflow of FDI, on the other hand is projected at $9 billion, against $4.7 billion in the previous fiscal and $3.2 billion in 2004-05. According to the council, headed by former governor of the Reserve Bank of India (RBI) C. Rangarajan, the ratio of the country's merchandise trade to its gross domestic product will be up 35.9 percent from 32.8 percent. This, the council said, signified the extent to which India is integrating with the global economy. "If we also include software exports, as indeed we should, the ratio this year will go up to 39 percent." The council has also projected a net accretion to India's reserves $22.6 billion by the end of this fiscal, up from $15.1 billion last year. Of this, around $8.5 billion has already been absorbed in the first half year. "It is estimated that another $6-7 billion would have come in the third quarter, leaving a like amount to be absorbed in the last quarter. The stance of monetary policy has to take this into account," the council said. At a broader level, the council has projected India's gross domestic product at $902 billion for this fiscal, against $798 billion in 2005-06 and $695 billion in 2004-05.
Source: IANS
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