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Indian economy pulls ahead of China

Indian economy pulls ahead of China

Author:
Publication: The Taipei Times
Date: April 2, 2004

India's economy soared 10.4 percent in the final quarter of last year, making it one of the fastest-growing in the world, even ahead of China's.

The last quarter's rise, up from an 8.4 percent pace in the previous quarter, was driven mainly by an expansion of nearly 17 percent in farm output. Last season, the country benefited from the heaviest monsoon rains in over a decade. Farming accounts for a quarter of India's economy.

The Center for Monitoring of the Indian Economy, based in Bombay, said in its monthly review, released on Wednesday, that overall GDP earlier forecast at around 8 percent, would probably be above 9 percent in the government's fiscal year ending last month.

But the jump, which makes India the fastest-growing Asian economy, is unlikely to continue.

"I would not get too excited about the double digits because there is a big skew in farm output this year which is unlikely to repeat," said Jyotivardhan Jaipuria, head of research at DSP Merrill Lynch.

Jaipuria said, however, that manufacturing and services would grow at a stronger pace in coming quarters."This indicates the underlying strength in the economy and reinforces the theme that India is growing nearly as fast as China," Jaipuria said, adding that "unlike China, India's growth phase is just beginning and can be sustained at close to double-digit rates."

The bright news on the economy will no doubt help the ruling coalition, led by Prime Minister Atal Bihari Vajpayee, ahead of federal elections planned for this month and next.

The Bharatiya Janata Party, which dominates the ruling coalition, is running on the slogan "elec-tricity, roads and drinking water." The party has promised to make the country an economic superpower by 2010. It has said it will develop power and telecommunications infrastructure and support the country's software industry.

The Congress Party, the main opposition, has said that it will make economic development in the villages the focus of its government if elected.

But both parties have stressed that they will focus on rural India.

The strong growth rate and aggressive privatization initiatives, including several sales of large stakes in state companies, have buoyed the general mood, but mostly in India's cities and towns.
 


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