India opened the New Year in a mood of optimism. The country's economy is recording its highest growth in recent years, and appears poised for further gains.
Indian news magazines called 2003 "India's Golden Year," and "India's Feel Good Year." These happy headlines were prompted by an economy that is bouncing back after several years of slow growth.
The economy is expected to grow by more than seven percent in the fiscal year ending March - significantly higher than 4.3 percent in the previous year.
The expanding economy fuelled high consumer spending among the country's growing middle classes. Stock prices gained more than 70 percent last year, and became Asia's second-best performers after Thailand. Indian markets attracted $7 billion from foreign institutional investor in 2003, the largest amount since the country opened its stock markets to foreign investors a decade ago.
In December, India's foreign exchange reserves topped $100 billion, considered a benchmark in a country that was on the verge of defaulting on its debt payments 12 years ago.
Economists attribute the turnaround in 2003 to several factors. Bidasha Ganguly, a senior economist at the Confederation of Indian Industry, said a vibrant high-technology culture created a booming outsourcing industry; good monsoon rains led to improved agricultural growth; and India's manufacturing sector posted higher profits. "The big corporates have really restructured," said Ms. Ganguly. "They have been through a period of very low growth, and during that period, they have seen to it that they have cut costs furiously, and they have become globally competitive as a result."
For the first time, Indian companies ventured into the international corporate market, making 35 global acquisitions.
Despite the new optimism, several areas of concern remain. Although annual per capita income has increased from $370 four years ago to $480, economists say the benefits of the expanding economy have yet to trickle down to the one-quarter of a billion-plus population that lives below the poverty line.
There are also fears that the country's lack of infrastructure could prove a drag on its potential. "There needs to be investment in roads, in ports, in airports," he said, "and one of the areas of concern is that the Indian government runs a very high fiscal deficit, so its ability to spend large amounts is limited."
However, most economists feel that the vigor of the Indian economy, combined with the advantage of its size, means India will get more global attention than ever before.