By Arvind Padmanabhan When India's Finance Minister P. Chidambaram presented the country's fiscal budget for 2005-06 recently, he had the statistics to support the robust picture he painted of one of the world's fastest growing big economies. The Indian economy is growing by 7 percent, nearly triple Britain's rate, its exports are expanding at 27 percent, foreign exchange reserves top $135 billion, the stock markets are at an all-time high and inflation stands tamed at under 5 percent. In a recent study, noted global consultants Goldman Sachs predicted India would overtake Britain in 2022 and Japan in 2032 to become the third largest economy in the world, after China and the United States. "As the year (fiscal 2004-05) draws to a close, we can predict confidently that all engines of the economy are running at nearly full speed," a beaming Chidambaram told the country's lower house of parliament, the Lok Sabha. "In a space of nine months, we have risen to the challenge and carved out many successes," he said of the multiparty United Progressive Alliance government, led by Prime Minister Manmohan Singh, that was inaugurated on May 22. He had reasons to feel elated. India's annual inflation rate, a nightmare for any government, had crept to a four-year high of 8.7 percent in August, mainly because of high crude prices, but has now been moderated at under five percent. The monsoon, which determines the fate of India's farm sector, played truant in large parts of the country and threatened output. The situation, however, was salvaged and the farm output is expected to even register a marginal increase. Similarly, the manufacturing sector, which had witnessed a marginal drop in the growth rate at 6.9 percent in the previous fiscal, is expected to grow at 8.9 percent in the current fiscal, while the services sector continues to boom. "This is unambiguously the best Indian economy ever," says Delhi-based economist Surjit Bhalla. "Structurally, the Indian economy of today and tomorrow is far superior to that of yesterday." Little wonder the stock markets - often a barometer for the overall performance of the economy - are ruling at an all-time high, fuelled by growing appetite for investments among foreign institutional investors (FIIs). The Sensex, a 30-share representative index of stocks trading on the 130-year-old Bombay Stock Exchange, is ruling 17 percent higher than the levels a year ago, close to the 7,000-point mark. FIIs, in fact, have already invested $2.5 billion in the Indian stock markets in the current calendar year, on top of a record $8.5 billion in 2004 and another $6.5 billion a year ago. "If the current investment pattern of overseas funds continues in the months ahead, we may see another year of record inflows. Many new foreign funds are entering the trading ring," says Neeraj Deewan of Quantum Securities. "Not long ago, big foreign funds side stepped Indian markets due to its casino like trading practices and lack of liquidity. Today, India is firmly on the radar of all big overseas investors," adds Deepak Shah of Pranav Securities. The number of registered FIIs in the country has also swelled from 517 at the end of last calendar year to 668, according to the markets regulator Securities and Exchange Board of India (SEBI). India has among the best track records on the issue of returns on overseas capital - ahead of China - with 77 percent of foreign investors making profits, nine percent at break-even point and the remaining on way to profitability. Such developments also sent the corporate sector on an expansionary mode with the volume of capital raised from the capital market - including the initial public offerings - rising five times to Rs.358.60 billion ($8 billion) in 2004. In fact, aided by a huge cash-pile and fuelled by a passion to go global, the once insular corporate India also expanded overseas like never before in 2004 and entered into 60 acquisition deals abroad. This compares with 28 overseas buyout deals inked by Indian companies in 2002 and 49 in 2003, says India Advisory Partners, a London-based database firm on mergers and acquisitions. Among the major deals, the Tatas acquired the steel business of Singapore's NatSteel for $300 million and overseas telecom carrier Videsh Sanchar Nigam Ltd. invested $130 million in acquiring US-based Tyco Global. The acquisition drive now is not restricted to traditional markets like Britain and the United States. Companies are going to countries as diverse as Australia, Romania, Germany, Angola, the Philippines, South Korea and Bosnia. "India's globalisation process has been uniquely balanced," says Michael Charlton, chief executive officer of the British government's inward investment agency Think London. "India is the only developing country among the top 10 nations for both attracting foreign investment and making investments globally," Charlton said during an interactive session with Indian industry in New Delhi. The country's external sector too is having a dream run with merchandise and services exports expected to cross a major milestone of $100-billion mark for the first time ever. "Our external profile is robust and international credit rating agencies are upgrading our sovereign rating. The balance of payments position is as comfortable as never before," Manmohan Singh said. "We expect merchandise exports of over $75 billion in the current fiscal and together with services exports of around $25- $28 billion, we will cross $100 billion in exports," Commerce minister Kamal Nath said. "Our merchandise exports will cross the $150-billion mark by 2009 and double the country's share in global trade," Kamal Nath told IANS. In many ways, India managed to grab the world attention in recent years with its booming information and communications technology sector and that is beginning to power a rising class of young consumers with high disposal income. A study by the National Association of Software and Service Companies says this sector is creating fresh demand for 12,500 passenger cars, 80,000 two-wheelers, 150,000 mobile phone subscriptions and a seven percent jump in real estate. In addition to the 850,000 strong workforce employed directly in the industry, it has also created 1.15 million indirect employment in tertiary industries such as transport, catering, security and housekeeping services, the study adds. As a result, not only has private consumption in India grown 11 percent in the current fiscal - the highest in over two decades - but the savings level at 26.6 percent is sharply up from 19.3 percent in 1990-91. The spirit of Indian entrepreneurship is also beginning to scale new heights - both in brick and mortar sectors like steel and frontier areas like biotech. Forbes magazine recently named India-born steel magnate Lakshmi Mittal the third richest person in the world after Microsoft's Bill Gates and USbased leading investor Warren Buffet. A total of 12 Indians figure in Forbes' list of World's Richest People 2005 including Azim Premji of Wipro, Mukesh and Anil Ambani of Reliance Industries and Naresh Goyal of aviation major Jet Airways. Last April, Kiran Mazumdar-Shaw, the founder of Bangalorebased biotech company Biocon, became the richest woman in India with a personal wealth of $400 million after her company successfully floated a maiden public issue. In fact, the governments of Western countries have started noticing such developments. Chidambaram and Kamal Nath are among ministers being invited to high-profile forums like the G- 7 and the Davos-based World Economic Forum. Says Kamal Nath, striking a positive note on the world's largest economy in terms of purchasing power parity: "India's growth story is a work in progress. The climax is yet to come. The best of India is yet to come."