Even the most diehard optimists would now admit that it will be extremely difficult to pull the economy back from its current downhill ride. According to official statistics released on Thursday, the economy grew by just 5.3 per cent during the last quarter of fiscal 2011-12 (January-March 2012). This has been the lowest growth rate recorded in any quarter during the past three years, substantially below the 6.1 per cent clocked during the third quarter (October-December 2011).The trend line is unmistakable: there has been a sure and steady decline over successive quarters. That in turn has necessitated a revision in the annual growth figures. Notably for the last year, while the advance estimates of February projected a GDP growth figure of 6.9 per cent, the rate has now been pegged at 6.5 per cent after factoring in the fourth quarter data. To put this in perspective, the economy grew by 8.4 per cent during 2010-11 on the back of an impressive 9.2 per cent in the fourth quarter. During the January-March quarter, industrial performance has suffered with manufacturing actually contracting by 0.3 per cent compared to a 7.5 per cent increase the previous year. Mining grew by 4.3 per cent, up from 0.6 per cent the previous year. However, construction was down by nearly a half. The services sector has had a fairly uneven performance. While ‘financing, real estate, insurance' saw robust growth of 10 per cent, the sub-segment ‘trade, hotels' decelerated sharply to 7.1 per cent from 11.6 per cent a year ago.
The latest data merely confirm the steady deterioration in the macroeconomic landscape. Recently, some of the world's leading investment banks had downgraded India's economic outlook for the fiscal year ending March 2013.The consensus seems to be that the Indian economy would grow by around 6.5 per cent. That is a figure that might still be difficult to achieve given the downward drift that has taken hold. The symbol of India's fall from grace is the rupee which has declined by more than 17 per cent against the dollar since the beginning of the year, creating new records each passing day. However, contrary to popular belief, a weaker rupee has not aided exports and manufacturing, both of which have declined. Imports have become costlier and the overwhelming dependence on foreign petroleum suggests the import bill will remain high. That in turn will fuel inflation. India is one of the few countries that has twin deficits — a fiscal deficit in the region of 5.8 per cent of GDP and a current account deficit likely to exceed four per cent. Investor sentiment has taken a big hit amidst widely shared perceptions of policy paralysis and this — combined with the simmering eurozone crisis — will obviously impact the investment cycle.
Keywords: Indian economy, GDP
In India GDP rate mostly depend upon the Agriculture sector,IT sectors.But unfortunality these sector not growing as much as
required.
Thousands of college in India provide education in IT field but only
few number of college which provide best facility to education and all
other college only give degree.In India Agriculture sector play
pivotal role.But unfortunality Government not interested how to
increase the food product in village.
and not provide the modern scheme in the agriculture field. Increases
the diesel prices very high,Uncertainty of rain,expensive Urea,
Phosphors and different product which use for increase the production
of the Product.
It is illogical to expect continuous growth at high rate year by year without let up. Economy is an organic structure and periodic down , which is not out, is a resting only to recoup and invigorate. Through out the world various economies have suggetsed only this pattern. we had a continuous boom and now a little downturn, particulalrly in the backdrop of world economic crisis is explainable.
the only way we can think is to think positively and move further instead of seeing facts and curves that will boggle our minds and mindsets, what is happening is happening all over and all the citizens of India are being paid for it, we cant compare past and present we have to be agile and move ahead instead of thinking much about what is goin to happen.leaders of our country definitely know this point and have to prioritize the dealings based on this fact and take action no matter which govermnent is in power. politics should be the place of solutions rather than problems.
what makes matters worse amid the deepening financial woes is the erosion of faith over the leaders.....the entire nation, investors and the global fora has been dissillusioned by the the snail-paced decision making and plethora of complecations that come with the coalition govt.......our only hope is a majority government , watever party it may be.
There are flaws in this editorial. I miss a profound analysis and interpretation of the economic data. Avid readers of The Hindu are used to high quality editorials but this editorial does not fulfill the expectations of the readers.
Unfortunately, the politicians are busy blaming and defending corruption during the last 3 years, that Governance has taken a back seat. Indecision in various economic policies are making India no more a destination for capital. Even worse is the judicial wrangles, due to which even exposed crimes on economic front go unpunished for decades and public is losing faith in judiciary.Irresponsible opposition parties have a single objective of opposing everything that govt does, irrespective of whether it is good or bad for the country.Coalition parties are only interested in their share of the cake.Indeed a scary scenario for the country.
It is an alarm signalling now the country's policy makers to awake, rise and start. The first thing is that the parliament must work for all days except Sundays and holidays for minimum eight hours a day and discuss and pass all pending bills and new bills. Strict austerity to save money which can be used productively. Wage freeze for at least one year. No foreign tours by any Minister except PM and exceptionally for few ministers.It is shocking that PM has always to say it is a national shame in every matter. Let there be a national Government representing all key political parties. Production and productivity should be the national goal and it must be monitored closely and those who cannot perform be sacked. Let there be only 50 well qualified ministers who can deliver and not 100 like tom, dick and harry. All offices right from PRIs, Municipals, Block, District,State and Central must work for eight hours a day and none should leave his/her seat from work.
As long as India has coalition governments, the ONLY priority of the government is how to keep the coalition together, and stay in power. That is a full time job, with no time for anything else, including the economy, the country or its people. Our PM's biggest headache is How to keep Mamata happy so she won't topple the government, how to keep DMK happy, and so on.
This is really astonishing, when most of the senior economist are
dreaming of a boost in economy after loksabha elections, it seems like
we are delving deep into an economic well from where the path of rescue
is a bit intricate. This is due to the governmental policy which
considers the elections worth than its country's growth.
I am happy that there is a final recognition that we are going in the
wrong direction.But the solution is not trying to patch it up with
stimulus or some stupid policies. It is time we understand why we got
into this mess rather than patching it up and moving on.We should want
a solid economy even if it is slow rather than bubble economy
stimulated through inflation.It's time that we recognize that the
current economic mess was result of wrong monetary policy and economic
policy which created this bubble economy and everyone was happy when
the bubble was forming and when it bubble bust it created all the
problems and now everyone is unhappy.
This comes as no surprise. As a percentage of our GDP, roughly 2.5% of our exports comes from the euro zone and as a percentage of our exports roughly 14.5% of our exports is to the Euro Zone. Much of the euro zone except for Germany is under recession and contraction. So obviously when Europe catches a cold India (and to a large extent the rest of the world) sneezes. India needs a better fiscal/export/trade policy where risks can be better contained and managed. Our dependence on the American market is much more significant and one fails to shudder on the likely impacts should USA fall for a second bout of recession. IIly our total dependence on a volatile Middle East for petroleum imports is equal putting all our eggs in one basket and defeating to the national economy as a whole.
The financial press in the West say similar things to the above, but
also raise concerns about: (i) uncertainties arising from apparent
inability of the govt to sweep under the carpet previously known
rampant corruption, against the background of tighter anti-corruption
measures in their own countries (ii) volatilities arising from the
unpredictable nature of "retrospective legislation" - given the plight
of a global corp with a massive investment in India (iii) reliability
of govt statistics [apparently Chinese growth and other figures are
under the scanner].
With the statistics of growth open to all the citizens, government cant blame downfall of world economy as the cause of inflation in india. The steep decrease had put forward a fact that current economic policy is not able to fill the loopholes of our economy. The retrospective tax scheme like GAAR can not be implemented because india strictly needs FDI. We also need to increase our production to increase export to counter import as to maintain the foreign reserve. Who else than PM himself can better understand the situation. He was the one who saved our country in economic crisis of 1991 by introducing NEP. Now its time we need an NEP -2 Mr. PM
The point is what is the solution? Our Government is being fed with suggestion for the early implementation of GST. But what is GST?
Have a look at it. All our maid servants (aam admi - rikshaw pullers, hawkers, drivers, gardners, chowkidars) all over India will have to pay GST at the rate of 16% while companies (indirect tax payers) will have to pay 0% because their GST liability will be reimbursed by the Government out of the GST collected from maid servants (aam admi)under GST credit scheme. Corporates will be happy for a tax free regime under GST. But again is it justified? Corporates will welcome GST even if the GST rate is fixed at 20% because ultimately our corporates will not have to pay even Re. 1/- as GST. That is why every chief of every chamber of commerce and industry is pressing the Government for early implementation of GST being called "economic reform".
But again, is it justified? Is it a reform?
As long as Indian politicians continue barking on vote-bank politics to cling on to power, India will not prosper and Indian will remain illiterate and poor. When Indians come out of petty prejudices of language, boundary, caste, creed, religion, all all that makes walls of divide, Indian politicians continue to 'divide and rule'. When can we see the real leaders in them?
Indian economy is passing through a hard time and the policy planners
of the country along with the various stakeholders of the various
import and export industries big or small are struggling to bring back
the economy on the right track of growth and advancement. The
information on the recent quarterly performance of the various sectors
of the economy show downward movement and are cause for concern for
one and all. The optimistic thinking that the depreciating Indian
currency will boast the export industry has been falsified. It should
be noted that China has managed to get better dividend of the
thoughtful depreciation of the Chinese currency but India failed to do
so.
The whole issue of effective recovery lies on the shoulders of the
policy planners and the executives of the various industries in India.
There is a silver lining for Indian economy and we must not get
discouraged by the current scenario but look forward for the bright
future of Indian economy.
I liked the edit. But our two main political parties are neither concerned about the impact of the faltering GDP, falling Rupee or of the likely inflationary impact of monsoon rain shortfall. They appear to enjoy blame game politics. Lack of political will, together the habit of linking political solutions with possible electoral gains or losses, is actually coming in the way of finding solutions of our present economic problems. This state of affairs is a big worry of all informed citizens. Citizens’ view is that our business leaders, bureaucrats and politicians must continuously engage in a dialogue to seek solutions for our economic problems, and the present blame game played by parties should pave way for cooperation in national interest.
The number saga of growth story revolving around manufacturing, mining, services etc. is nothing to do with common man. It is worth noticing for investors living in india or abroad in the form of firms or companies.The decline/increase in rupee valuation is mainly meant for exporters & importers. The common man needs only roti, kapda aur makan. These stats are befooling the common mass who are striving for daily livelihood.
Ms. Sonia Gandhi, PM Singh and FM Mukherjee need to stop dithering and get on the business what they are voted to power, i.e., growing nation's economy and securing its future. However until now UPA govt and Sonia Gandhi have been more interested in clinging to power at any cost even when PM Singh and FM Mukherjee know quite well what need to be done to take India back to a path of growth and creating opportunities for its people. However in its 2nd term the UPA govt failed miserably in major areas in failing to curb rampant corruption, high inflation and declining economy. There is no point complaining about "allies", if the "allies" prevent the govt from enacting policies that are needed to safeguard nation's interests then those are not "allies" rather they are the enemies. It is better to let the govt fall rather than allowing the "allies" to veto the difficult but necessary major decisions. My question to PM Singh is, what is the point of staying in power when you are ineffective!
India is facing a dark time and we all know it. The political class of our country is determined to drain our country dry. What we need is an overall change in the system. the problem that we face today is twin fold. The economy is slowing down and inflation is going up. To counter the effect of slow growth the govt. needs to invest heavily in infrastructure. We as a country do produce surplus but neither do we have the adequate storage facilities nor do we have a proper distribution system. If the govt invests in such projects then it will improve infrastructure, improve growth and help in curbing inflation as well.
The fact of the matter is that there are solutions to the problems that we face today however, there is no political will to take any action.
If we do not do something about the economic policy by next year, We would be in big trouble. We need stringent majors to revive our economy. Government can not sleep for long.
If any party starts a naton wide campain, "India Stinking" or "India
Darkening" it may have chances to return to power.
Had we continued with the policies that were in place since 2008 we
could have achieved better development figures. Policy paralysis is a
catch phrase that newspapers find fascinating to use and they use but
its actually bad policy rather than policy paralysis. The GAAR,
proposed land acquisition bill and retrospect amendments in taxation
laws are treated as bad policies rather than no policy. Apart from
these the taxation and subsidies formula that govt. uses actually make
our finance system a Tantalus Cup. The taxes go onto increase the
prices of commodities and govt. the provide subsidies at them. The
subsidies don't reach the desired and adds to corruption. Its not that
situation can't be seized and improved but I know, political rivals
won't allow the govt to write better economics paper because it (Govt.)
has written their political science exams terribly. Opposition stood
united on 31st May to bring India on knee we wish they stand united to
let India come bacon track.
The government needs to reduce interest rates by at least 2% to bring
the growth story back. In retrospect, the RBI and the finance
ministry had a poor understanding of the effects of sustained hike in
interest rates on GDP growth rates. I expect another year of anemic
growth before India recovers.
Simultaneously, it needs monitor food inflation very closely, and control inflation by maintaining enough supplies. While we produce enough wheat, rice, sugarcane and pulses, the production and supply of fruits and vegetables have been below optimum, hence the volatility in prices.
One of the worst editorial from Hindu.It's just a transfer of stale statistics from Govt data without any intelligent analysis of the reasons for slowdown.Readers look for rational thinking and dynamic debate on subjects of such importance in the editorials, not just some black and white letters to fill a column.
This was supposed to be India's time, India's century. We were regarded in international circles as the next superpower, a rising tiger. But our political ineptitude has ensured that we miss the bus, once again. This is not the first time India has squandered opportunities. India's economic history is full of instances where we failed to seize the moment and our political inaction ensured that we remain a third world pariah. Success only comes to individuals and nations who act decisively when the moment comes. But decisiveness has never been a strength of our society.
Countries like Japan, Germany and China seized their opportunities to become economic superpowers. When the moment came they worked harder, faster and better to become the best. Our strikes and bandhs have ensured that we work even less than we should. Our ministeries prefer to sit on files till they gather dust. It seems that our dreams of being a superpower will remain just that, a dream.
Apparently, during the early stages of this recession, India rode on
influx of capital from developed countries that saw growing India as
safe bet. Now, with recession deepening across the world, that
confidence has diminished, resulting in flight of capital, with
investors tightening their belts and fists. And the government didn't
help the situation, betraying policy paralysis and spinelessly
dancing to the clumsy tunes of regional populist puppeteers.
The government should creatively use this situation to heal the bad effects of overheated growth of the last decade, mending the strained social fabric caused by uneven growth, investing in fundamentals - education that instills entrepreneurship and creativity, infrastructure etc - so that we are better prepared to ride out any such economic collapse in future with a reasonably uncoupled and stable domestic market.
Even for the educated people, economic growth rate is just a number bandied about by politicians, businessmen and the media. Today what the ordinary citizen of India is worried more about is the fact that a rupee in hand buys less and less every passing day(inflation for the erudite). Discourses on economic growth do not feed the people. Have the government, the economists and the media any information on when an ordinary citizen of the country be able to make both ends meet.
Time to introduce EMERGENCY for 5 years,
EX military general should run the show with total discipline for min 5years like
Brg: LEE KWAN YEW. of singapore.
General Attaturk of turkey
Major shk. mohammed Rashid of dubai.
and see their growth and progress check china?
In india we have too many politicians -parties - corruption and too much talking - time to shut up and only work hard in larger interets of the nation for which bring in EMERGENCY.
Ex gen v.k. singh is the right man to run the show and put everything in order -this is shame what is going on? too much corruption looting the nation in crores and crores when is it coming to an end?
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