ITC LIMITED
ANNUAL REPORT 2007-2008
DIRECTOR'S REPORT
Report of Directors & Management Discussion Analysis for the Financial Year Ended 31st March, 2008:
Your Directors submit their Report for the financial year ended 31st March, 2008.
SOCIO-ECONOMIC ENVIRONMENT:
India sustained its pre-eminent position as one of the fastest growing economies in the world in 2007/08. Despite the relative deceleration in several sectors, real GDP notched an impressive growth of 9%, as per revised estimates of the Central Statistical Organisation. India joined the ranks of the trillion dollar economies in the world, giving us yet another moment of national pride.
The Services sector, accounting for about 56% of GDP, emerged once again as a primary driver of economic growth. Led by a continued upswing in the trade, hotel, transport and communication sub-sectors, Services posted a remarkable growth of 10.8%. The Manufacturing sector was under pressure this year from a weaker growth in consumer durables, as well as a slowdown in cement and steel that consequently impacted the construction sector as well. Despite this setback, which knocked off 3.2% from the pace attained last year, manufacturing grew by 8.8%, reinforcing India's competitive strength in diverse sectors.
The revised estimates indicate that the Agriculture sector has grown by a handsome 4.5%. While higher support prices and closely directed extension services have been the primary growth drivers, the challenge of sustaining such a growth level calls for focused attention to the sector, backed by substantial investments. Domestic demand continued to fuel economic growth, driven by Investment demand, the fastest growing component. Strong private sector investment, buoyed by surging capital inflows, easier bank credit and reinvestment of profits, resulted in strengthening the build up of Gross Fixed Capital Formation, an important pre-requisite for sustaining high rates of economic growth. Private...