India set to become leading growth centre in Asia

27 December 2010 05:11 am - 0 - {{hitsCtrl.values.hits}}

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It's official. The great Indian growth story looks set for a sequel in 2011 as the economy readies to wipe out any lingering traces of the global recession. Strong growth across sectors promises not just to beat back the recession blues but also cement India's position as a leading growth center in Asia alongside China.

Corporate India can take heart from the International Monetary Fund's projection that the economy will complete the 2010 fiscal year on a 9.7 per cent growth rate powered by robust industrial production and a strong macro economic performance. With the transition from public stimulus to private sector sector-led growth underway, industry will be the backbone behind the projected 8.4% growth in the next fiscal.

Spurred on by the phenomenol success of the Coal India IPO, Indian PSUs are clearly on a roll. Year 2011 will begin on a high note with three back to back offerings of blue chip navratna companies. Steel Authority of India , Indian Oil Corporation and Oil and Natural Gas Corporation will hit Dalal Street giving Indian investors a wealth of options to choose from. With studies establishing that wealth creation in PSU IPOs is substantially higher than that of private companies, it looks like a win-win year for the public as well as the PSUs.

The private sector isn't exactly going to be left behind either. With most sectors ready to build on the growth momentum of 2010, Indian industry has reason to welcome the coming year with open arms. The auto sector which grew at a robust 28 per cent in 2010, is ready to rival the heyday growth rate in the IT/Ites sector in the next few years. "India was the second fastest growing automobile market in 2009-10 and is expected to grow further in the coming year," says Abheek Barua, chief economist of HDFC Bank . It is estimated that the size of the Indian passenger vehicles segment in 2020 will be close to 9 million units and two-wheelers nearly 30 million units.

India's cash-rich firms are expected to keep up their hunt for overseas targets in 2011 and may top this years record M&A activity. Data from Thomson Reuters, which showed that 2010 was the biggest year for outbound deals for the Indian economy, points at the hunt for natural resources driving overseas deals in the coming year. With companies looking for assets from Africa to Australia, oil, gas, coal and iron ore will feed the hunt for overseas acquisitions even among mid cap companies.

A more than complete recovery from the global recession will be signalled by the hiring spree India Inc is expected to indulge in. Positive sentiments across sectors will spell a boom for the job market according to the Manpower Employement Outlook Survey . The net employment outlook at a high of 42 per cent will make Indian employers the most optimistic in terms of addition to their payrolls.

With India one of the 40 most improved economies to do business in according to the Doing Business in 2011 report by the World Bank , China is ready for some stiff competiton. As Corporate India finishes the first decade of the new millennium with a bang, the world is watching.

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India set to become leading growth centre in Asia

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