Indian Economy is no wonder called an agrarian economy. Thanks to the agriculture sector, the economy expanded very strongly in 2010. The sector bounced back sharply after good rainfall.
Owing to the agriculture and non agricultural push the Indian economy is expected to grow at 9.1% as quoted by OECD - Organization for Economic Cooperation and Development. However government of India has forecasted a growth of 8.5%, as the methodologies differ and government doesn't include Indirect taxes to calculate GDP.
The sectors are further strengthening with increase in consumption spending, recovery in farm incomes and robust business investment, the economy is shifting from the recovery phase to one of sustained high growth. According to the OECD, agricultural sector recovery has also helped to damp inflation, which is expected to moderate in the near term. Inflation, which was in double-digits for a long time, came down to 8.58% in October.
“With domestic demand strong and the current account deficit widening, a steadfast commitment to timely fiscal consolidation and further moves to normalize the stance of monetary policy will be important for ensuring balanced growth ahead,” OECD said.
Meanwhile, the group has projected the global economy to grow 4.6% this year and expand 4.2% in 2011.
Source- Livemint
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