Indian Economy Update

Macroeconomic Overview 

India – “Continues to be the Core of Activities”

On growth, our view is of cautious optimism due to 

global and domestic economic factors

2,000

9.3%

8.4%

6.7%

6.5%

500

0

FY07

FY08

Agriculture

FY09

Industry

FY10

FY11

Services

FY12#

GDP Growth

5.3%

2.5%

4.0%

7.9%

8.0%

7.6%

3.0%

5.3%

4.6%

6.0%

4.3%

8.0%

6.3%

9.7%

12.0%

7.0%

Growth of key sectors for Copper

10.0%

Speedy implementation of big‐ticket economic 

reforms such as –

• National Manufacturing Policy, 

• National Electronics Policy, 

• Land Acquisition Bill and 

• GST 

8.4%

12%

10%

8%

6%

4%

2%

0%

1,000

• Challenge is to balance growth and

manage inflation

• Structural reforms and policy intervention

by government will help

9.6%

1,500

USD Bn

• Growth has been impacted by prolonged

global slowdown, low consumer demand

and slow investment by government in

infrastructure

2.0%

0.0%

FY09

Manufacturing

FY10

FY11

Electricity and Gas Supply

FY12#

Construction

GDP Growth

GDP Growth and Sectoral Contribution

Slowdown in investment amid uncertain market 

conditions

• Current GFCF growth rate still better than 

that of FY09 (economic slowdown)

• Decline in GCFC in past few quarters is on 

account of ‐

Gross Fixed Capital Formation (GFCF)

40

16.2

• Overhang from slowdown in Europe

15

35

10

7.5

3.5

30

6.8

5.2

36

34

34

33

32

5

34

• Major companies have put expansion plans 

on hold and are adopting a wait and watch 

policy for economic condition to improve

13.8

33

• High and stubborn inflation which has led to 

hardening of interest rates and slump in 

investment

20

16.2

• High energy prices

• Slow pace of policy reforms at home

Y-o-Y

growth %

% Share to

GDP

FY06

FY07

FY08

FY09

FY10

FY11

FY12

25

0

Source: CSO

% share to GDP...