Tracking the Economy through years

Tracking the GDP growth

International Reaction
In 1999 Goldman Sachs Inc., one of the world's largest global investment banks, predicted India's economy growth at an unprecedented rate in the coming years. “India's GDP in current prices will overtake France and Italy by 2020, UK and Russia by 2025 and Japan by 2035,” said a Goldman report. “By 2035 India's economy is expected to reach the position of third largest economy of the world behind USA and China,” the report added. A leading British News Channel recently stated, “India could overtake Britain and have the world's fifth largest economy within a decade as the country's growth accelerates.” Commenting on India's massive and evergrowing workforce, the report stated, “In thirty years, India's workforce could be as large as that of the USA and China combined.”

The Bull Run
The Bombay Stock Exchange, or the BSE is the oldest stock exchange of India. Founded in 1875, there are currently 4800 Indian companies listed with the stock exchange. As of July 2007, the equity market capitalisation of the companies listed on the BSE was USD 1.005 trillion. The most popular stock index in India is the BSE SENSEX, which is a value weighted index of 30 of the largest and most actively traded stocks in the BSE. The BSE SENSEX is constantly reviewed and modified to reflect only the current market trends.

Timeline reflecting the rise and rise of the SENSEX
July 25, 1990 - Touched the four digit mark for the first time, closed at 1001
January 15, 1992 - Crossed the 2000 mark
February 29, 1992- Surged past the 3000 mark
March 30, 1992- Closed at 4091 amid expectations of a liberal import-export policy. The Harshad Mehta scam hit the markets and the SENSEX witnessed unabated selling
October 11, 1999 - SENSEX crossed the 5000 marks
February 11, 2000 - Infotech boom helped the SENSEX cross 6000
June 21, 2005 - Settlement between Ambani brothers boosted investor sentiments; SENSEX crossed 7000 September 8, 2005- Brisk buying by foreign and domestic funds helped the index cross 8000
December 9, 2005- Crossed 9000 to touch 9000.32 during mid-session trading
February 7, 2006- Touched 10003 during mid session trading
March 27, 2006- Touched 11001 at BSE for the first time
April 20, 2006- Crossed 12000 during mid session trading
October 30, 2006- Riding high at the BSE, the SENSEX touched 13000
December 5, 2006- Crossed 14000 and touched 14028 during morning trading
July 6, 2007- SENSEX crossed another milestone and reached the magic figure of 15000

However, during the bull run, the SENSEX also witnessed a few stumbles along the way. In May 2006 the SENSEX plunged by a record 1100 points during intra-day trading. The drop in the SENSEX caused share market investors to lose Rs 6 lakh crore within a few trading sessions. The Finance Minister, P Chidambaram made a press statement when trading was suspended for the first time in the history, to assure investors that nothing was wrong with the fundamentals of the economy, and advised retail investors to stay invested.

The Downside - The Rich and Poor divide
The National Commission for Enterprises in the Unorganised Sector (NCEUS), under the chairmanship of Arjun Sengupta has compiled a detailed report on the conditions of the majority of the workforce of India. According to the report, “77 per cent of of India's population lives on less than Rs 20 a day.” The NCEUS report has found, “The condition of work and life of the country's 'common people' projects a sordid picture coexisting with 'Shining India'.” Over 394.9 million of Indian workers i.e 86 per cent of the country's working population, belong to the unorganised sector and work under “utterly deplorable” conditions with “extremely few livelihood options.” Says Sengupta, “Over 836 million Indians haven't even been touched by the euphoria of a buoyant economy.”
The NCEUS estimates,

• Total employment in the Indian economy: 457 million
• Unorganised sector: 394.9 million (86%)
• Only 0.4% have access to any form of social security

Sengupta with the report on unorganised sector

Agricultural sector – The backbone of the Economy bearing the brunt
The agricultural sector is getting feminised. The NCEUS has found that 73 per cent of women are still in agriculture as compared to 52 per cent men. Agriculture is the largest unorganised sector in India, with 57 per cent of India's total population and 73 per cent of India's total employment. Farmers constitute 36 per cent of India's total workforce. Interestingly, 40 per cent of Indian farmers dislike their occupation with the highest dissatisfaction in Bihar (50%) and the lowest in Andhra Pradesh (24%). Says the NCEUS, “90 per cent of India's agri-labourer households are landless. 67 per cent of India's estimated 8.6 million child labour work in agriculture.”

What Ahead?
All the governments since the Narsimha Rao government, have continued with the policies of liberalisation and globalisation. In 2005 government policies allowed 100 per cent FDI stake in private sectors. Though the country has seen economic growth at an unprecedented pace, a staggering amount of work is yet to be done. The electricity sector, internal custom policies are just some of the areas that India needs to work on. Moreover, the level of corruption and red tape existing in almost all levels of the government and different public offices are issues to ponder upon. But, for now, let us put these problems on the back burner and proclaim a toast to 150 years of India's first war of Independence and 60 years of swaraj. At the same time let us take a pledge to carry the tricolour forward and hold it high for all to see. India has taken the center stage. Cheers to a vast country and its diverse inhabitants.