After recovering from the impact of global financial crisis, Indian economy is poised for more expansion, according to a parameter of the Organisation for Economic Cooperation and Development (OECD).
The OECD Composite Leading Indicators (CLI), which provide early signals of turning points in business cycles - fluctuation of the economic activity around its long term potential level - shows India’s score at 101 at the end of March, higher from 100.7 in the previous month.
According to OECD, if the CLI of a country is increasing and is above 100 it means the economy is on expansionary track. However, if CLI is decreasing and is above 100 it means the country is in downturn.
Decreasing CLI below 100 mark indicates slowdown.
However, increasing CLI below 100 shows recovery in an economy.
Among BRIC nations, India and Russia are the only ones whose CLI is above 100 and is rising. At the end of March, CLI of Russia stood at 102.2, higher from 101.6 in February.
While China’s indicators showed halt in expansion, Brazil’s parameters indicated that recovery is not sustaining.
For Brazil, the CLI decreased from 99.3 to 99, while China’s CLI was at 102.2, down from 102.5 in the previous month.
Indian economic growth slowed down to 6.7 per cent during 2008-09, after coming under the impact of deepening global financial crisis, compared to nine per cent annual growth in the preceding three years.
After the government provided stimulus by cutting taxes and increasing public expenditure, the economy improved and is estimated to have expanded by 7.2 per cent during 2009-10.
This fiscal economy is expected to grow in the range of eight and 8.75 per cent by various estimates.
