Sighting better days ahead?
With new numbers that show a steeper slowdown for India than expected, the state has sprung into action, with the RBI infusing money into the economy, cutting key interest rates by 1%, and the government planning on easing FDI further.
And with Moody’s predicting that export growth will continue to slow alongside domestic demand, the government and the RBI are going to pay close attention to our numbers.
But amidst all the doom and gloom, there are predictions that the Indian economy will recover by 2009. I am no pessimist, but I wonder if a year will be enough to brighten up the Indian economy, linked as we are, whether we like it or not, to the health of the global markets. Within our borders, we are faced with additional concerns around generating enough jobs and investment for our growing workforce, and addressing issues of inequality and access. If we do build a recovery in 2009, it won’t be just from our relentless entrepreneurial spirit. We will also need courageous reforms towards ensuring a healthy domestic market.
The biggest steps in 2009 I would hope to be see are ‘back to basics reforms’. The high growth of the last few years was boosted by a huge liquidity bubble. As the global economic crisis spreads, it is clear that India will have to go back to fundamentals - expand primary education, liberalize higher education, build our infrastructure and cities, fully implement the single market and reform our labor laws. The path to recovery in 2009 will be expanding access of opportunity to our young people through these reforms. Else both growth and the reaping of our ‘demographic dividend’ will remain a mirage.
Putting all that aside, I do enjoy articles like this one in the Sunday Economic Times, which quoted ‘ace fortune tellers’ predicting a movie-like ‘happy ending’ for 2009. At least the stars are bright!
My best wishes to you for the year ahead.
Tags: growth, Indian economy, predictions
January 6th, 2009 at 12:59 am
Nandan,
I liked the final one - your link of ET. You have an unique sense of humor :-).I too wish India does have a good year in 2009!
January 8th, 2009 at 5:38 am
‘Amen’ to the last link of Economic Times! But I agree it’s unlikely that Indian economy will recover from a jolt of this scale in 2009. Thanks to Raju and Satyam, we have taken a few more steps back now. Just when the stock market was making up for some of the losses we had this catastrophe!