[T.S.R:14656] B&K India Economics Monthly

The key highlights are:
·         In FY2011, Real GDP growth would move into a higher trajectory  as private consumption too will pick up along with capital formation
·         The 7.4% Real GDP growth in FY2010 vs. 6.7% in FY09 is primarily the result accelerated growth in Gross Capital Formation.
·         Contribution (%) to Real GDP Growth(Delta)

	FY 06	FY 07	FY 08	FY 09	FY 10
Private Consumption	61.3	54.4	67.7	65.0	37.0
Government Expenditure	10.5	4.7	11.8	28.0	17.4
Gross Capital Formation	57.3	61.8	63.4	-10.3	36.8

This growth in Gross Capital Formation is confirmed by the improved growth in Capital Goods(from 7.3% in FY09 to 19% in FY10)  and Project Investments under Implementation (from Rs 35,53,535 crore in FY2009 to Rs 50,77,531 crore in  FY2010, a growth of 42.9%  They grew by 34.7% in FY09).

	IIP: Capital goods growth (% YoY)
FY 2004	13.59
FY 2005	13.95
FY 2006	15.74
FY 2007	18.24
FY 2008	18.01
FY 2009	7.29
FY 2010	19.15

We expect Private Consumption to pick up along with Gross Capital Formation in FY2011 and push GDP growth to a higher trajectory of 8.25%-8.5%
 
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