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India Losing Shine?

Saturday, March 21, 2009

 

 

The times ahead are quiet unpredictable owing to the global recession that has occurred. No country is certain about its future. Neither the superpowers, nor the booming ones are confident about their positions in the coming time.

 

Image from ZDNetAsia

Image from ZDNetAsia

 

 

India did well this year comparatively, but the recession had its toll by reducing the growth. The growth has come down to 7.3 % a little less than that of the last year. In addition, future expectations are reducing linearly too. What would survive now, especially the developed economies is its business friendliness.  India stood at a dismal 75th place, down from last year’s 64th place in the Forbes’ business friendly country survey. [ Source]

The various parameters considered by Forbes were stock market performance to reflect the extent of disrepair in countries’ banking systems, as well as investor confidence in a recovery. Intellectual property rights, the promotion of free trade and low inflation, combined with low taxes on income and investment, and personal freedom. Don’t you think any other business friendly destination would catch up and replace India soon? This matters for the fact that India houses the largest number of poor of the world.

 

Already, IMF has forecasted slow growth for India in the coming years. [Source] The next estimate is that India’ GDP growth the following year would cling down to an approximately 5%. Azerbaijan is the country showing the maximum GDP growth rate at 15%. Well, whatever the numbers say, one thing is for sure, India’s growth is not likely to stop, come what may! Even 5% growth to the world’s fourth largest economy (on PPP terms) means a lot for sure! However, our great Indian IT sector does not seem to get affected by anything. The same IT growth will be continued.

 

However, for ensuring a good future, shouldn’t India focus on being a business friendly place? FDIs are kind of nerves of economy for any developing nation. India should get a decent place in business-friendliness. Topping the list for 2009: Denmark, for a second straight year, takes the No. 1 spot. The U.S. is up two spots to No. 2, Canada is up four spots to No. 3, Singapore is up four to No. 4 and New Zealand is up seven to No. 5. Okay, let’s not expect a Third World country like India to directly reach in the top 10 spots, but isn’t it a cause for concern that India’s place is going down? We always have plans and estimates considering some constant growth rates. Going by that logic, I think we should also have some plans and estimates for some constant contractions taking place like this. At least, they will help us make aware and avoid any contractions and deteriorating place of India in the world.  

 

India’s inflation has fallen down to a record low of 0.44%, the lowest since 1977! It has gone even below most of the developed countries. The developed countries had an average of 2.5% inflation. Now, is that good news considering the fact that food items have gone costlier?

 

The necessities of humans are becoming costlier day by days and other items for luxury are getting cheaper.

 

Well, whatever the facts and stats say, one thing is for sure. The more innovation a country brings in, the more prospects of its future are bright. India must have its own businesses, especialy in IT and ET both, coming up rather than merely being an outsourcing destination. The political will is not there, but public’s will is certainly there. Resources ready, but will not ready!

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7 Comments leave one →
  1. Sunday, March 22, 2009 3:41 pm

    Thanks for this very informative post Ameya. It was a pleasure to read. As you quite rightly say, things are not looking rosy right now but India will probably suffer less than most Western economies in the near future. According to what I’ve been reading, Western economies are set for zero or even negative growth, whereas India is predicted to reach a low of 4/5% growth because of its high growth rates at the beginning of the crisis.

    Small comfort, but better than Europe and America!

    Seeya!

  2. Tuesday, March 24, 2009 10:57 am

    Ameya this is really informative. I feel your passion for India, it helps a to see people who are passionate about their countries and want the best for her.

    Keep it up.

  3. Tuesday, March 24, 2009 2:52 pm

    Michael (Mikool),
    Yeah, that’s true. But in an overpopulated country like India, poverty will exist for long even after this growth for a major segment of society.

    Joseph,
    Agreed! Passion is good, but zealotry isn’t. At times extreme patriotism proves bad as we have seen in the past with Nazism, Mussolini and Hitler! 😀
    That thin line is important.

  4. Rowan permalink
    Thursday, March 26, 2009 10:30 am

    Hmmm, yes, very true. Don’t worry, no-one’s going to accuse you of being a Zelot. Yet, as usual, your passion is good to see. Interesting to hear about India’s economic status at the moment, when it’s such a big issue. Thank god for the IT industry, eh?

    I wonder… Thanks to you, I now know more about India then I do about Australia, at least in terms of economy. Odd. :).

    CYA!

  5. Saturday, March 28, 2009 1:27 pm

    Hey Rowan,
    Yeah, India did comparatively well in IT, and so is sustaining in the times of recession. Heh, glad to know you are knowing more about India! 😀

  6. Wednesday, April 1, 2009 5:32 am

    Good analysis… The whole thing was probably just a hype to begin with! 🙂

  7. Thursday, April 2, 2009 11:10 pm

    @Nikhil
    Thanks! How can media survive without hypes! 😀

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