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If 2004 turned out to be a good year for the Indian economy, 2005 will almost certainly be even better. Strong export growth and buoyant domestic demand will fuel rapid expansion of manufacturing capacity, and substantial portfolio investments are likely to support the stock markets.
The Indian economy suffered a double scare in 2004, first when the market- and reform-friendly BJP-led National Democratic Alliance (NDA) was voted out of power, and second when the monsoons were delayed, raising the possibility of drought. It was feared that the rapid economic growth that the economy was enjoying and beginning to take for granted might come to an abrupt halt.
In the end those fears proved unfounded. The economy continues to thrive. Over the coming year GDP is expected to grow 6.25%-6.5%, which is marginally above the long-term growth of...