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Straight from the Specialists

Where the growth in Q1 came from

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

GA man walks his cow under high-tension power lines leading from a Tata Power sub station in Mumbai's suburbs February 10, 2013. REUTERS/Vivek Prakash/FilesDP growth of 5.7 percent in the April-June quarter was unexpected in view of the southward drift of India’s economy over the past two years. No wonder it pepped up the Bharatiya Janata Party-led government at a time when the ruling coalition is listing its achievements after 100 days in office. The question is where this growth came from and whether it will be sustained in future.

India’s economy has been slowing after achieving 9 percent growth three years ago. That was because the Congress-led government failed to fuel the economy. The absence of policy reforms, paralytic governance – combined with persistent inflation – discouraged investment. Growth tapered to 4.7 percent last year.

The Q1 data seems to signal a recovery with growth jumping to 5.7 percent. Some sectors did perform exceedingly well with over 10 percent growth. The first is electricity though its size in the overall economy is small. But it has now come up against stubborn problems like coal shortage, which has harassed the power sector. Coal production is unlikely to increase and the power sector will have to fall back on imports. The 10 percent increase in power generation contributed 3.4 percent to the increase in GDP in the first quarter.

Business services such as finance, insurance, and professional services like IT also exhibited high growth. This sector is a major contributor to GDP and constitutes nearly a fifth of the economy, and developed at a double-digit rate. Consequently, about a third of the increase in GDP has come from this sector alone.

A call to action to galvanize momentum around maternal, child health in India

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The last decade has witnessed one of the most sincere, dedicated and coordinated efforts toward addressing global development and healthcare challenges. National and international policymakers, development partners and researchers have come together to work toward a common vision of a better and healthier world.

In September 2000, building upon a decade of dialogue, world leaders unanimously adopted the United Nations Millennium Declaration. In doing so, they committed to a new global partnership to reduce extreme poverty and laid out a series of time-bound targets with a deadline of 2015 that have come to be known as the Millennium Development Goals (MDGs).

Afghanistan a building block for China-India ties

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The appointment of a former ambassador to Kabul and New Delhi by China to the role of Special Envoy for Afghanistan highlights China’s thinking of what it can do in Afghanistan.

China is not seeking a leadership role in the country, but is rather looking for regional partners to support its efforts. A key partner is being sought in New Delhi where the Narendra Modi administration has welcomed Xi Jinping’s early overtures for a closer broader relationship. The opportunity presents itself that Afghanistan’s two largest Asian neighbours might be on the cusp of closer cooperation to help the nation onto a more stable footing.

How high will the Sensex go?

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

A bronze bull sculpture is seen as an employee walks out of the Bombay Stock Exchange building in MumbaiSince April, the stock market has been in a frenzy after a long period of utter gloom. In quick succession, the Sensex jumped month after month to cross 26,000 on July 7. This was not mere euphoria created by the election of the Narendra Modi government, with a single-party majority in the Lok Sabha after a long time.

National agenda to bring $100 billion of domestic household savings in capital markets in next five years

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(Rajiv Deep Bajaj is the Vice Chairman and Managing Director of Bajaj Capital Ltd. The views expressed in this column are his own and do not represent those of Thomson Reuters)

Currency of different denominations are seen in this picture illustration taken in Mumbai April 30, 2012. REUTERS/Vivek Prakash/FilesIndia is an attractive investment destination for foreign institutional investors, due to its vibrant economy, favourable demographics, high growth potential and well diversified capital markets. In fact, the benchmark Nifty has representation from 10 broad sectors, four with weightage in double digits.

India’s Iraq problem

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(This piece comes from Project Syndicate. The opinions expressed are the author’s own)

Iraq seems to be falling apart, with the rapid advance of the militant Islamic State in Iraq and Syria (ISIS) threatening to lead to the country’s division into Shia, Sunni, and Kurdish entities, while blurring its border with its turbulent western neighbor. Moreover, the tumult is now threatening to spread to two more nearby countries, Afghanistan and Pakistan, which already are facing myriad internal challenges. For India, the message is clear: its national security interests are at risk.

Higher tax revenue from higher growth

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The 2013-14 budget got completely out of hand because of a whopping shortfall in tax revenue. Development outlays had to be drastically cut to manage the fiscal deficit.

The key to the budget is revenue. The ratio of gross tax revenue to GDP reached a high of 11.9 percent when GDP growth was at its peak of more than 9 percent in 2007-08. Since then, both declined and the ratio has been in the narrow range of 10-10.7 percent. GDP growth is a painless way of raising revenue.

Nehru’s last stand?

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(This piece comes from Project Syndicate. The opinions expressed are the author’s own)

The victory of the Bharatiya Janata Party and its leader, Narendra Modi, in India’s general election last month has raised a crucial question about the country’s future. With the BJP sweeping to power on a platform of aggressive nationalism and business-friendly corporatism, has the socioeconomic consensus dating to India’s first prime minister, the democratic socialist Jawaharlal Nehru, come to an end?

Election 2014: Imbalanced participation of women

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The marginalization of women in electoral politics is deeply embedded in the party system and the imbalanced gender power relations in the main political dispensations in India. They continue to be discriminated against not only in terms of seat allotments to contest elections but also within the rank and file of major political parties.

The reasons for women being on the fringes are varied but the focal factor that excludes them from the process is the patriarchal and male-dominant party competition structure that continues to exist in the Indian subcontinent. This not only dissuades females from electoral politics but also acts as a barrier in their quest to share political power.

How to get India on the highway to high growth

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The president’s address to parliament this week lays out the new government’s roadmap to get India’s economy back to high growth. That will take time and is not easy either.

True, the BJP government led by Narendra Modi inherited a weak economy – growth was a mere 4.7 percent; industry was static; there was no employment generation; and inflation was at over 8 percent. The only comfort was that foreign exchange reserves exceeded $312 billion.

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