| ECONOMIC SCENE |
| Economy back on track : CMIE
The Indian economy has shown signs of recovery during the first two months of financial year 1999-2000. According to the review of the Indian economy, by the Centre for Monitoring Indian Economy (CMIE), the industrial sector signalled an impressive recovery during the first two months as major industries posted handsome gains. Cement production increased by 27 per cent and steel having recorded a decline of 1.8 per cent during 1998-99 posted a positive growth of 1.5 per cent during April, 1999. A recovery was also evident in the automobiles sector with the growth which was first noticed in the two wheeler segment, expanding to passenger cars and commercial vehicles which have posted a sharp rise of over 28 per cent, the review said. In the petroleum sector consumption has spurted by recording a 12 percent increase in April 1999 after a six per cent growth during 1998-99 . Crude oil production was up in April after a consistent decline during 1998-99. Thermal power generation was up 11 per cent in April 1999, exceeding fall in hydel power generation. On the revenue side, total tax collection during April-May 1999 was 21 per cent higher than during the same period last year. Inflation has remained under control with WPI rising by only four per cent in May 1999. The growth of CPI, however, is still higher at over eight percent. Foreign exchange reserves went up by $1 billion to $30 billion as on May 28, 1999. Net investments by Flls remained high at $ 600 million during April-May, 1999 as compared to an outflow of $ 243 million during the same period in 1998. India's external debt touches $ 95.72 billion India's stock of external debt stood at $95.72 billion at the end of December 1998 up from $ 93.91 billion as on March 31, 1998. However, the percentage of short term debt to the total debt has came down to 3.8 per cent from 5.4 per cent over the period. Also the ratio of external debt to GDP was down to 23 per cent from 23.8 per cent during the period according to the status report released by the finance ministry. It was as high as 37.7 p.c. in 1991-92. However, at same time the paper called for monitoring all contractual contingent liabilities arising out of both the debt and non-debt liabilities as they have budgetary implications. Further debt-service ratio, which reached a peak of 35.3 per cent in 1990-91 declined steadily to 19.8 per cent of the current receipts in 1997-98. India's position in world Trade and in Direct: Foreign Investments India's share of World Trade to-day is mere
0.6 p.c. as against 2.2 pc (over 3.5 times proportionately) at the time
of independence. The nadir was reached in the early 1980s when after decades
of attempted self sufficiency our share touched 0.4 p.c. The share of developing
world as a whole is 25.p.c. China leads with its exports at $ 183
In direct foreign investment China attracted in 1997, US $ 44 billion, Brazil $ 20 billion, Argentina $ 6 billion, Thailand $ 5 billion, Poland $ 5 billion and India $ 3.3 billion. Co-ordinating Group on WTO issues The government has constituted a 9 member Inter-departmental
group under the Chairmanship of the Commerce Secretary Shri. P.P. Prabhu,
with the objective of achieving better co-ordination on issues relating
to the World Trade Organisation (WTO). The mandate of this group includes
dealing with all WTO related aspects of India's interface with foreign
countries in order to optimise India's negotiating leverage and the decision
making in the WTO. The other members of the group would be Secretary (Agriculture),
Secretary (Economic Relations) External Affairs, Secretary (Finance), Secretary
(Industry), Secretary (Law), Secretary (Textiles), Secretary to the Prime
Minister, PMO and Director General of the Council of Scientific and Industrial
Research (CSIR).
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