Indian Economy after the third stimulus package: key sectors and their performance

After the announcement of the fiscal stimulus packages, the first of which was unveiled in December 2008, the Indian economy has started recovering. Changes in government policy with regard to foreign direct investment, among others, have changed the economic climate. Cabinet secretary K M Chandrashekhar said “I think we are seeing the first clear signs of a turnaround. The spending on flagship and infrastructure programmes and steady hikes in MSPs for wheat and rice seem to have kept the economy afloat, driving demand,” he said.

Industry research reveals the following sector trends:

Cement: According to industry resources, the cement sector has grown 9.97 per cent in December 2008 as compared to November and the year on year increase is 11 per cent. Cement and steel are seen as key drivers and with the construction sector, and have a significant impact on the growth sentiment.

Automobiles: According to industry research, in January 2009, the passenger vehicles sector showed a 32 per cent rise over December 2008 whereas the increase for commercial vehicles is 23 per cent over a similar time frame. The sector has been attracting investments, especially foreign direct investment from companies such as Mercedes Benz.

FMCGs: The trends in this sector reveal that the sector has been recording growth. There is a record growth in year on year terms at 26.4 per cent for the quarter ended December 31, 2008, according to a top bureaucrat.

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