Infrastructure programme will turbo charge India’s boom

Having just returned from a 10 day trip to India to visit companies, Sam Mahtani, manager of F&C Emerging Markets Fund, and top performing Indian Investment Company Fund, is confident that the Indian growth story is set to continue into 2007 and beyond.

Mahtani said the 8% GDP growth rate which has driven the economy forward the past few years, would continue for at least another two years.

“Business and consumer confidence both remain at very high levels and corporate budgets are now being calculated on the premise that the economy is going to remain in high growth mode for the foreseeable future. The strong growth environment is not only helping job creation but also driving up wage growth, which itself is driving consumption.”

Mahtani said the three key economic sectors; manufacturing, services and agriculture were all performing well and would continue to do so because of the Government’s commitment to a vast infrastructure programme.

“The Government’s infrastructure programme which will be rolled out over the next five years will underpin much of the growth. The government has committed itself to spending US$320 billion on infrastructure starting in 2007. The manufacturing sector also has plans to spend US$80 billion over the next few years. Both of these factors will drive economic growth,” said Mahtani.