Indian Economy to grow at 7%

[article from the very interesting newspaper: The Hindu online]

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.
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.
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.



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