**India's GDP to Grow at 9.5% in FY 2009**

Financial Express (India) ^ | 17 June 2008 | Financial Express (India)

[AmericanInTokyo]

'India's GDP to grow at 9.5% in FY 09'

Mumbai, June 16: India's real GDP is expected to grow at an impressive 9.5 per cent in FY 09, the Centre for Monitoring Indian Economy (CMIE) said in its monthly review in Mumbai.

The Indian Economy is heading towards the fourth consecutive year of an over-9 per cent growth and like in the last five years, growth this year too was expected to be driven by capital investments happening in India, CMIE said.

As per CMIE CapEx Service, projects worth Rs 3.4 lakh-crore are scheduled for commissioning in FY 09. This would be the highest-ever completion of investments in the Indian history, CMIE said.

The capital investment boom in the country drives the current growth phase of the Indian Economy.

India's GDP started rising by over eight per cent since FY 04. And, the gross capital formation (GSF) grew in the range of 13-23 per cent during this period.

CMIE expects growth in GSF to accelerate to 18.7 per cent in FY 09 from 13.4 per cent in FY 08. This robust growth in GSF is expected to more than offset the moderation in the growth in private final consumption expenditure (PFCE) and Government final consumption expenditure (GFCE).

CMIE stated that the PFCE is expected to grow by five per cent in FY 09, after growing by 7-9 per cent in the preceding three years. While the slower growth in the PFCE would mainly be on account of the higher base in 2007, the prevailing high inflation would also affect the consumption demand to some extent.

However, inflation is not expected to depress the PFCE dramatically as income levels in India have also gone up significantly in the last one year.

[trumandogz]

China will likely hit a major bump on their way to surpassing the U.S. and that bump will likely be their one child policy.

They got to have the bodies and they have to have the brains.

[Cronos]

The U.S. economy grows the GDP of India every year

Not quite -- the US real growth rate in 2007 was 2.2% i.e. $0.27 trillion. And, yes, both are waaaay waaay behind the US and both need to work at full steam, continuously for a couple of decades to come CLOSE in terms of overall GDP. But they will come close as they try to improve themselves --> for both these countries, their real competition is not against the US or against each other, their real fight is to bring out millions from poverty.

China brought nearly 400 million out of poverty in the two decades from 1980 to 2000. however, there are still more than half a BILLION Chinese who are dirt poor --> and the same or larger number of Indians.

all this growth is just to bring people out of mind-numbing poverty, not to compete with the US for top jock position

[Cronos]

India's religion diversity is:

• 81% Hindu --> approx. 850 million
• 12% Muslim (Sunni, Shia, Ismaili, Sufi, Ismaili, Bohri, Ahmaddiyya, etc.) --> approx. 130 million
• 2.5% Christian (Mostly Catholic, but also Syrian Orthodox, Syro-Malankar, Syro-Malabar, some small Protestant groups and large numbers of Baptists in the north-east of India) --> approx. 30 million Christians (and that doesn't include the large numbers of Christians who migrate as they have a higher literacy rate)
• 1% Sikh (like the Indian Prime Minister),
• 1% Jain (a religion that may have influenced Buddhism)
• <1% Buddhist (despite Buddha having been born and lived and preached in India -- depictions of him as Chinese to the contrary)
• 70,000 Zoroastrians (the religion of Cyrus the Great of Persia) -- the largest community left in the world after the Islamic conquest of Persia

[bruinbirdman]

Somewhere in those ensuing 22 years, the U.S.A. will have some years of growth more than 2.5%. ChiComs will not grow at 11% forever.

It is convenient propaganda to attribute to Commies such wonderful industriousness.

yitbos

[LS]

Since everyone is throwing stats around, how about these:

India is already the world's largest English-speaking country (i.e., highest total # of English speakers).

China, by 2010, will have the world's largest Christian population.

[LS]

I don't think anyone is attributing China's remarkable growth to "communism." For about 20 years, China grew by simply putting more hands to the tiller---it wasn't productivity growth, but it was growth. Now, however, they are experiencing productivity growth, even outsourcing. This is almost entirely due to capitalist policies and a hands-off approach for large sectors of manufacturing and industry.

Yah, there is still the old commie streak alive, but increasingly the Chinese are just ignoring communism and state control. Ideology is being abandoned for practicality. As Deng said, "Black cat, white cat, who cares as long as it catches mice?"

Will there be a day of reckoning? Probably. Sooner or later, if states continue to exert control over the "commanding heights" of industry, and especially over individual liberty, there will be a fight. But we have plenty of examples of former commie countries that changed direction without a drop of blood being spilled after Reagan backed down the Soviets. There was nothing written in stone that, say, E. Germany or Czechoslovakia couldn't have "chosen" to stay communist---but they saw it didn't work. It is entirely possible China's communism will likewise go out with a whimper instead of a bang.

[Cronos]

The Chinese are communists in name alone -- they are increasingly more like fascists.

Industriousness, yes, due to throwing more people at a job. In terms of productivity, the US still is high up -- as is Germany, Japan and even India in comparison to China.

In any case, the net result is that China and india will be somewhere close to the US by 2030 -- I doubt they would overtake the US, but they will be close -- as I said in another post here, what matters more to both is bringing millions of their countrymen out of poverty

sobtiy

[rusty millet]

Vast expanses of land, abundant natural resources, Brazil reminds me of the status of the U.S. in the 1800’s.

[jveritas]

China brought nearly 400 million out of poverty in the two decades from 1980 to 2000. however, there are still more than half a BILLION Chinese who are dirt poor --> and the same or larger number of Indians.

Even those 400 million who were brought out of poverty in China are still extremely, extremely poor according to our standards of living. 90% of Chinese and Indians live in a very shocking poverty if we measure it according to our standards of living. The vast majority of the remaining 10% do not even qualify to be considered "poor" according to our standards of living. Probably 3% of the population of China and India live somewhere from "poor" to "very rich" according to our standards of living.

[LinnKeyes2000]

gee, i thought that was the growth of Us federal spending each year :)

[bruinbirdman]

"The Chinese are communists in name alone -- they are increasingly more like fascists."

"I'm not a Communist, I'm a socialist." "I'm not a Socialist, I'm a Fascist." "I'm not a Socialist, I'm a Progressive." I'm not a Progressive, I'm a Liberal." "I'm not a Liberal, I'm a Democrat."

"We need a new Communism, those other guys didn't do it right." "I'm not a Socialist, I'm Labour." "Labour didn't do it right, we are now New Labour, The Third Way."

"Socialists are not Communists. Bolsheviks are not Communists. Fascists are not Communists. Communists are Communists in name only. That single party that runs Red China are really Capitalists."

yitbos

[MunnaP]

This is to create a frame of reference for the GDP discussion ...

What drives the GDP of any modern economy?
The massive amount of energy derived from fossil fuels or other means.
Oil, Coal, Natural gas. In most the cases this energy use is largely
unavoidable. You have to heat your home in winter. You have to travel
by car. The public transportation is nonexistent outside certain areas.
The culture is more individualistic and fosters more consumption of
everything including energy.

India is a different ballgame. The energy usage of India would never
go as high as United states in per capita or in total. Most of the
country has warm/hot weather. No heating homes. Most of the homes
are well ventilated and door/windows always open. Air conditioning
is fairly rare outside the major cities. Even in major cities air
conditioning is relatively less used than in US. The country is 1/3
of US.. Transportation fuel requirements are never gonna be as high as US

Would India’s GDP be as big as US in USD numbers? probably never....

Would majority of people in India have a reasonably close standard of living
as that of average person in US?
That can happen even with a lower GDP number for India as a whole...

The folly of GDP statistics is that Consumption gets counted as wealth..

[bruinbirdman]

"The massive amount of energy derived from fossil fuels or other means. Oil, Coal, Natural gas. In most the cases this energy use is largely unavoidable. You have to heat your home in winter. You have to travel by car. The public transportation is nonexistent outside certain areas. The culture is more individualistic and fosters more consumption of everything including energy. "

Any discussion of GDP and energy cannot exclude requirements of commercial, industrial consumption which is vastly larger than individual, private consumption.

A few million CFL lightbulbs or window air conditioners is nothing compared to the electricity used in one aluminum processing plant.

yitbos

[swarthyguy]

>>Optimism and Enthusiasm

Absolutely striking is the mindset of Indians today.

When you consider the myriad social problems, the environmental situation, the crowds, the pollution, the dirt what comes shining through is the hope in the future.

Contrast to America’s current pessimism and messiah desire.

[MunnaP]

Any discussion of GDP and energy cannot exclude requirements of commercial, industrial consumption which is vastly larger than individual, private consumption

- The commercial and industrial consumption is a direct function of individual consumption. Would you agree ? All the commercial and industrial enterprise would not exist without the individual demand to consume the product of such enterprise...
If we take the example of aluminum , the demand for aluminum products by individuals would drive the aluminum production
in turn would drive electricity demand for the processing ..

The point I want to stress.. in case of India the total consumption would never approach the American levels because of inherent constraints of weather, culture and mindset....in turn never creating economy bigger than US...Unless they find some really creative ways of wasting resources...

[AmericanInTokyo]

I can see it in the eyes of the average Indian junior high school kids, at say, a bus stop in Chennai or Mumbai.

I do not see it in the eyes of the average American junior high school kids.

I reduce it to this lowest common denominator. If America does not change its mindset and its drive, in a large scale, wholesale national mental revolution, America's time will indeed be passed. Then, WHOM will we have to blame?