India's ambitious rural infrastructure development programme "Bharat Nirman" will further drive demand for industrial goods this year, a UN report said on Tuesday.
"The 'Bharat Nirman' programme, which comprises a investment totalling $40 billion (about Rs 1,74,000 crore) over a four-year period starting in 2005, would add impetus to demand for industrial goods over the medium term," United Nations' Department of Economic and Social Affairs said in the report.
In 2005, the report said, India maintained a strong economic performance, driven largely by the manufacturing sector, owing to booming domestic demand for consumer goods as well as infrastructure development.
"There has been a strong response by business community to the opportunities created by an expanding domestic market as the middle class grows - thus sustaining consumption demand - infrastructure bottlenecks started to be addressed, and prospects for exports remained positive," the report said.
Backed by continued strong growth of information technology (IT) services as well as tourism, the service sector also performed well, the report added.
With return of near normal harvest, the farm sector also contributed to the country's growth in the year gone by, the report said.
Pointing out that there has been a rise in portfolio capital flows to emerging markets, it said Indian stock market too rose by 17.6 per cent in dollar terms since December 2004.
{{/usCountry}}Pointing out that there has been a rise in portfolio capital flows to emerging markets, it said Indian stock market too rose by 17.6 per cent in dollar terms since December 2004.
{{/usCountry}}The report also believes that real estate sector is overheated in many cities in India.