Front Page   

Economy to grow at 7 p.c.

NEW YORK, OCT. 18. The Indian economy is expected to grow at an annual rate of at least 7 per cent, according to a study conducted by American investment bank Merrill Lynch.

The study, titled `India Strategy: the 360 degree view on India,' said despite the initial hiccups, stock markets have stabilised and concerns about political stability have waned since May 22, when the new government headed by Prime Minister, Manmohan Singh, assumed office in New Delhi.

It listed five areas that would have an effect on the corporate climate in the country over the next year and a half. They are: compounded growth rate of 7 per cent for the next several years (more than the 6-6.5 per cent witnessed over the past few years); rise in government investment, particularly in such sectors as infrastructure; slowdown in consumption growth because of rising inflation and interest rates; globalisation, which will affect earnings; and earnings per share, which could be 20 per cent from the current 15 per cent.

The study, carried out by Head of India research team at Merrill Lynch, Jyotivardhan Jaipuria, focused on 11 sectors — auto, banking, cement, computer services, consumer staples, energy, engineering, media, metals, pharmaceuticals and utilities.

On globalisation, Mr. Jaipuria said, "It will no doubt have its pros and cons. On the positive side, it would open up new markets for India or bring down production costs boosting revenues and profits". On the negative side, the study said, corporate bodies need to gear up their management systems and prepare for challenges.

Indian companies were showing signs of self-confidence and more international acquisitions are likely after the revamp of several corporate bodies, the study said.

UNI

Printer friendly page  
Send this article to Friends by E-Mail

Front Page

News: Front Page | National | Tamil Nadu | Andhra Pradesh | Karnataka | Kerala | New Delhi | Other States | International | Opinion | Business | Sport | Miscellaneous |
Advts: Classifieds | Employment | Updates: Breaking News |

Stories in this Section

Veerappan shot dead
Venkaiah Naidu quits; Advani is BJP chief
Congress sticks to stand
Four Chief Justices being transferred
Uma Bharti ill
Rain douses Indian hopes
A timely break
Economy to grow at 7 p.c.
2 children killed as live wire falls on school building

Copyright © 2004, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu