Since 2008 end, Indian government has injected close to US$130B to stimulate the Indian economy. Indian GDP is little over US$1T and thus it represents around 10% of total GDP. Some of the key monitory tools used by RBI(Reserve Bank of India) So what we can expect in FY2010, we can expect following event(not necessarily in same order):-
to stimulate revive Indian Business sentiments are as given below in Table1:-
Table1: Key Indian Monetary Policy Rate(YoY%)(Source:RBI)
Indian Government supported the Indian monetary policy initiatives by increasing the spending in primarily rural and infrastructure space and offered tax break to key sectors including shipping,Manufacturing and Technology. To improve Indian infrastructure, Overall spending on infrastructure space will increase to 9% of GDP by FY14 from current 6% of GDP. Below picture shows how government spending has shot up abnormally in last one year.
Picture 1: Consumption and Expenditure by government and Private Firms(Source:RBI)
Result: overall IIP(Industrial Production) shot up at a record pace since last two year, Total production in key sectors including mining; manufacturing grew at 11.3% in comparison to previous year. The below graph depicts overall movement across durable and non durable sector.
*All data are from RBI
So what we can expect in FY2010, we can expect following event(not necessarily in same order):-