Looking on the bright side.

As 2004 began, there was no shortage of good economic news for India. In the third quarter of 2003, gross domestic product grew at an annual rate of 8.4 percent. Foreign-exchange reserves stood at record levels of more than $100 billion; the stockmarket had recorded its biggest annual rise in 12 years; inflation and interest rates were low; the current account was in balance. China next door was booming, and for once this was seen as an opportunity rather than a threat; and the globalization of services in international business played to India's strengths. Unsurprisingly, India's finance minister, Jaswant Singh, says that the fundamentals of the Indian economy are better than ever before. Much attention was given to a forecast published in October 2003 by Goldman Sachs, a United States investment bank, for Brazil, Russia, India and China, four large developing economies. It predicted that, over the next half-century, India will continue to average annual growth of more than 5 percent. The most fundamental long-term reason for optimism is demographic. More than half of all Indians are under 25 years of age. The fall in interest rates has come as the currency, the rupee, has broken with its traditional steady depreciation against the dollar.