Some basic data (latest)

==Latest GDP growth 8.1% trend upwards with industrial production up 7.3%y/y and services up 9.9%y/y.
==Industrial Production growth 7.3%y/y
==Foreign reserves $134bn
==trade balance negative $37bn trend worsening
==Current account negative $16bn trend worsening

Short news

== Long misruled Bihar voted for change. Laloo Prasad Yadav reigned Bihar directly and indirectly for 15 years in which time Kidnapping against ransom became a growth industry and poverty, illiteracy, corruption and violence thrived.
==Indian real estate prices are shooting through the roof. In Mumbay you will have to spend NPRs110 mio per Ropani. Not too bad. ($31.6mio per hectar) and that is not the end of the story. Two reasons are behind. First investors are betting on the consumption driven growth of India's economy, leading to glitzy shopping malls, entertainment centers, multiplexes and luxury hotels. The other reason is India's emergence as a hub for global outsourcing. Foreign direct investment is coming in to finance infotech parks. Now also Indian banks are prepared to invest huge amounts to finance commercial and residential properties. In all the glamour there stays one risk, that is the absence of clear titles to property making the risk of litigation high.

== Central fiscal deficit close to 10% of GDP which means fiscal consolidation remains a key challenge.

== Trade balance strongly negative but current account helped by ongoing Foreign Direct Investments.

Education in India

Despite many problems the number of people attending universities in India nearly doubled in the 90s to 9.4mio, The price of this has been an overall quality decline. But India has two valuable things. One is its collection of elite institutions like the All India Institute of Medical Sciences , the Indian Institute of Science in Bangalore and the Indian Institute of Technology. These institutions take the cream with every year application of 180000 hopefuls competing for 3500 places. These institutions produces a stream of highly educated people who help to set professionals standards and help to keep India plugged into the global knowledge economy.

While the elite institutions produce many people who get brain-drained away, they also keep many bright people from emigrating and may even attract NRI back if the economy keeps booming. Nowadays the brightest students stay in India, while the second best go to America.

The latest development is a booming private universities sector, which still has problems but the best private colleges are doing admirable work responding to demand for technical and managerial technicians often in highly creative ways.

India a country of chances

India has become increasingly prominent in the world economy and trade flows in the last decade. Economic reforms implemented from 1991 have stimulated growth in productivity, investment and trade. As a result, India’s economy was one of the world’s fastest growing large economies over the last ten years, with average GDP growth of 6.2% per year. Nonetheless, India faces significant challenges, particularly in managing the fiscal deficit, developing infrastructure and ensuring increased gains from liberalization.

Travelling in India

One of the fastest growths of air travelling is registered in India. At the Paris Air show this month alone India placed billions of US$ in orders. 3 Indian airlines took 20 jets from Boeing and 125 from Airbus.
No doubt Indian aviation is taking of at an extra-ordinary fast rate. 6 new airlines are planning to enter the market this year. While in the first quarter of 05 domestic air travel rose 25% year on year the international travel staid with 20% year on year growth not far behind..

Sure the high growth rate in India reflects the fact that the aviation market there comes from a low base. From 1bn people only about 20 million or 2% traveled by air last year and this percentage is sure to increase over the coming years strongly. While the Indian government opened the doors to new domestic carriers and is trying to increase competition on international routes, the development of its airports lacks far behind. With now 192 aircraft in operation and 490 aircraft scheduled to arrive in the next 10 years the infrastructure of airports might become a serious problem in the next 2 years. But the development is wonderful for pilots and stewards/ stewardesses who also become a scarcity seeing a golden future with wages up significantly.
Electricity shortage may put brakes on India's speed of development

Supply of power

Permanent power cuts are a way of life in India and the shortage is worsening. Over the past decade, electricity generation has grown at an annual rate of 5.5% per year, but the demand has grown faster. That's in the urban area. In the rural area electrification is slow and just 44% of households in rural area have connections to the grid. Indians industries long used to the failings of the national grid has survived by building its own generating plants. One problem of the shortage is that tariffs are covering one average just 75% of supply cost, means that suppliers of electricity loose trillions of ICs, which damaged their ability to add distribution capacity and to carry out basic maintenance. This happened despite an increase of tariffs of 20% since 2000.

The Indian government is now looking for alternatives of electricity production. India's nuclear industry which supplies up to now about 2% of the electricity got a boost when Manmohan Singh went to US in July and secured American help. Other areas have attractive potential as well. Hydro power already produces a quarter of India's needs and can be increased . Other renewable forms of energy are wind power solar power, and bio fuels which can be tapped more to substitute coal, for the time being the biggest energy producer. Don't forget another point, that is enhancing of energy efficiency.

FOREIGN INVESTORS WELCOME IN INDIA
Foreign investors interested in India's financial sector normally agree on two things.
1.The earning potential in India with its fast-growing economy and burgeoning middle class is high. 2.India's bureaucratic and protectionist traditions place tight and complicated limits on foreign ownership.
Now the door seems to open. Foreigners will be allowed to take a stake of up to 49% in companies managing distressed assets. Portfolio investors may buy a up to 49% in an offer for sale, with single buyers limited to 10%.
India’s volume of bad loans is estimated at IC 595bn ($13.6bn) or about 5% of all banks' loans
Allowing foreigners to buy NPL should bring welcome cash to the banks. But according to some the rules may prove too restrictive to attract large foreign investments while others are more optimistic.
Fears that foreigners would scoop Indian assets on the cheap seems to be the main reason lying behind the restrictions. Those fears might be overblown. While in East Asia the collateral for bad loans was often property, the price of which soared when economies recovered; in India the main collateral are industrial assets.

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