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Indian Economy Predicted to Continue Strong Growth


The Indian government says it expects the country's economy to stay on a high growth path in the coming years. India has had one of the world's fastest-growing economies in recent years.

Wooing foreign investors to India, Prime Minister Manmohan Singh recently told an international business conference in New Delhi that the economy has been growing "at an unprecedented rate."

The prime minister expressed confidence that strong growth will continue in the coming years.

Mr. Singh has reason to be optimistic. The latest figures show that economic growth reached 8.1 percent in the first half of the financial year, maintaining India's position among the world's fastest-growing economies.

Economists say the strong growth was fueled by buoyant performance in the services and manufacturing sectors.

Mahesh Vyas, head of the Center for Monitoring of the Indian Economy, says many people had expected high oil prices to slow economic growth, but that did not happen.

"The eight percent growth numbers are above expectations," said Mr. Vyas. "The economy is doing much better than what most analysts in India believed it would. But it is momentum in the investment areas where we are seeing lots of action. Lots of companies are setting up new plants, expanding existing capacities."

Taking advantage of the optimistic figures, India is trying to woo more foreign investment.

Prime Minister Singh told foreign businessmen at the recent New Delhi conference, organized by the World Economic Forum, that bottlenecks to growth are being removed. He said billions of dollars are being spent on improving infrastructure, including the building of new roads, and the modernizing of sea and airports. Inadequate infrastructure is currently rated by businessmen as the biggest obstacle to operating in India.

The government has also promised to give a big push to agriculture, to keep pace with the broader economy. The agricultural sector grew by a meager two percent in the last six months.

India has attracted foreign investment in recent years by opening its economy to competition. Overseas funds are also flowing into its buoyant stock markets, which reached new highs last months after many companies posted record profits.

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