Why Is The Indian Economy Still Promising?

“What !”   “Did I read the heading wrong?”
Actually no, you didn't. A lot has been said in the past few years about India and its economy. In fact, ours was the most talked about economy in the past decade. We were raring to go, speeding away in terms of growth rate, giving complex to even the biggest economies of the world; we were the most promising nation in the world teasing our 'Dragon' neighbors. But lately, India has slowed down. As a matter of fact we are snailing now.
So has India lost its sheen? Is the growth saga complete, done, finished and a thing of the past now! No, not at all. India is still one of the most promising economies of the world.
To understand better , we must delve deeper into India's status right now, it's demographics, market potential and future prospects.
Prima facie it might look like India and China, the two most talked about countries of the world and  rightly touted as the world leaders in the next generation, are among the fastest growing economies of the world. Unfortunately, that's not true. Neither India nor China figure in the list of world's top ten fastest growing economies. In fact, India ranks around 35th (2012)  in terms of economic growth rate globally with a country like Mongolia topping the list. So why is it that investors worldwide still show their confidence in India? It is important to note here that it's the base effect that's important. India is a huge economy of close to 2 tn $ annual GDP. That being said, it is really humongous addition to the economy if a nation grows at 8-9 % annually on a base value of 1.5 to 2 tn $. Nigeria is a minuscule economy so while they outpace India and China in terms of growth rate (in % terms), the absolute addition to the economy is still very small. This is the prime reason why India was considered a forerunner in the race of nations-to-be. But have we lost that edge now? No, ours is a relatively huge economy and hence a growth rate of 5% might not be good enough but it's not too bad either. India is still running the race and is going fairly good if not great.
Second is the India's self-sufficiency. We have a huge population (Thanks to male nymphomaniacs like Lalu ji) which makes India a huge market in itself. Unlike China, we are not an export driven economy relying heavily on export bills to boost the economic growth. We have a huge market within our country that makes it possible for Indian production to be consumed within India itself. This was one prime reason that India remained largely unimpacted by the 2008 recession. China, on the contrary, is highly dependent on its exports especially with US. Major chunk of Chinese exports are 'dumped' into US. This Chinese love affair with US goes to such an extent that if one fine day US economy nears death, China will have no choice but to succumb to death along with like a true loyal lover. Some might also argue here that exports form an important aspect of any country's economy because it helps boost your forex and balances your import bills thus slashing CAD. Yes, it is important but as they say there is no full-proof theory when it comes to macro-economy. There always has to be a fair balance between various parameters. No one theory can completely define a country's economics. India should definitely aim to increase its exports, but at the same time it should be checked that these exports do not come at the cost of the domestic market Also, the economy should not get over-reliant on exports only.
Third is the huge unexplored potential of the Indian markets lying at the 'Bottom of the Pyramid' (BOP). This is one sector that has almost been left out of the development process. When this market starts to pick up India's market size would almost double. Again, this would make India more self-sufficient which is desirable. This is one reason why foreign behemoths still look forward to invest money in India and will continue to do so in the coming few years. India has immense potential to grow in future which makes it a great business destination (lest we talk about the rigamaroles of Indian red tapism!).
Fourth and probably the most important is our huge labor force which apparently includes me and you. We are about 120 bn people with close to half of them being at the peak of their careers. The next 20 years are the golden age for India because we will have the biggest working force in the world. We Indians, by nature, are hard-working and street-smart which further adds on to this. India's mettle has been acknowledged by economists and business houses across the world.
Hopefully, the IT outsourcing boom was just one of many more such booms to come. The world knows the power of India today. India is raring to go, wild yet calm, strong yet feeble. So India is still one of the most promising economies of the world with a potential to transform the world in the years to come.

Pseudonym : h!v

The Great Battle Of 2014 - Demystified

So after a hiatus of close to three months, here I am, pitching in again, throwing some light on one of the most followed upon topics by the people of the world's largest democracy - "General Elections 2014". In this article I won't be all mushy and delicate with my opinions; in fact, there will be some criticism - hope nobody sues me for slandering, but then none of what's written here is fake.

The facts are real; the opinions are rather mine.

The battle for the Prime minister's Office boils down to not just two leading national parties, namely the BJP and the Congress, fighting one another to prove their hegemony. The equation here is far more complex - there are inter party disputes, conflict of interests of parties that are members of the same coalition and there are also internecine conflicts within parties, especially within BJP.

Let’s look at the elections with a bird's eye view, analyzing what's going against the two major parties when it comes to reaching that magical figure of 273.

Image Courtesy:www.indiatimes.com

 WHAT CONGRESS HAS DONE WRONG :

INC has been in the soup lately - for the sake of this article let me call it the Italian 'Scam-Soup'. Congress has been executing one scam after the other so blatantly and consistently that the people's trust on Congress and its leaders has really taken a bashing. So despite its spicy flavor, people are not ready to have the scam-soup anymore. There has been a litany of scams in the past few years - Coalgate, 2G, 3G, CWG...'MadamG' and what not. It seems that the Congress ministers of state are more interested in pulling off these complicated scams, no doubt they hardly manage time for other 'unimportant' works like public welfare and good governance. Truly speaking, the UPA led coalition is in shambles at the moment with a long list of allegations tainting the image of its ministers. The CBI and the CAG, while struggling to get the perpetrators of a scam to book, are soon burdened with another scam - far too complicated and involving much more money than the previous one. It's a mess.

The economy is also struggling and the growth has largely been sluggish - Thanks to the lackadaisical attitude and policy paralysis of our ministers. One of the world's most promising economies until a few years back, almost on the verge of touching the two-digit growth mark, is now snailing at a mere 4-5% growth. And then if that's not enough, the troika of  the leading credit rating agencies of the world - Moody's, Fitch and S&P - are deteriorating India's stand in the international market by relentlessly talking about downgrading India's rating even further. Any more fall in the ratings, would plummet India down to junk status. And that would be a big blow to the economy. From the people's perspective too, the economy is not any better. Inflation is ever increasing, interest rates are rising, and rupee is dipping like mercury in winters and markets in the job are also at their all-time low. All credits to Congress. The giant robust bull of Indian economy is now reeling under pressure and trying to fight its way out of the vagaries of the western economies.

WHY IS BJP NOT A BETTER CHOICE EITHER ?

The BJP is not a stable party within itself. Its party leaders can't manage their own internal politics, let alone they would be able to manage the politics of the seventh largest nation of the world. 'Mr Red', I mean Lal Krishna Advani or the angry old man, has been all hustling and bustling with a 'Modi' elevating as the forerunner in the race to the Prime Minister’s office. Advani has divided the party further into two major factions, the Modi's and the Non-Modi's. At a juncture when the entire so called 'Parivar' of the BJP should be on its toes to curb this menace called Congress, they are busy in these petty fights. Mr  Red, with this attitude, you should not be called the party patriarch anymore. And Mr Modi, please learn to behave like a would-be-PM of the country and get over your tantrums. Your arrogance and 'I’m-the-man' kind of attitude is way too much for the people of this country to deal with. You are surely the people's best bet today but please learn to make people believe in you rather than trying to impose your belief on them.

THE NUMBER'S GAME:

Neither the Congress nor the BJP, by any chance, would be able to reach that 243 mark all alone. They would need the support of regional parties to form a coalition. Now the situation on both sides is pretty worse. The Congress lately lost two of its major allies, the TMC and the DMK. Its terms with the SP do not seem very good either. BJP also is struggling to soothe things with JDU.  Also, the BJP, with it banking on NaMo as the Prime Ministerial candidate, will not be able to get the support of many parties, if at all it appears out as the one with the major chunk of votes.

The bottom-line: Both the BJP and the Congress need to have at least 200 seats on their own to be able to form a coalition at the Centre. If that doesn't happen, the election result can swing in any of the infinite possible directions.

The Con-PM vs The Bha-PM :

This one's a bummer. While we surely know now that Bhartiya Janta Party-PM candidate would be Narendra Modi (NaMo), the Congress is still playing it ugly and has not openly come forward with a name for Congress-PM candidate. It might also be that the Congress is vacillating from Manmohan Singh to Rahul Gandhi and back to Manmohan Singh as their choice. But to expect Manmohan Singh to come up for a third consecutive term, especially when the

country's economy and also the country itself is not doing so well, would be far too much. So most probably it would be Rahul Gandhi (RaGa).

This epic battle between NaMo and RaGa is due for sure, if not now then surely in 2019. But for now, let’s presume its NaMo vs RaGa, which most likely is the case.

Now NaMo is surely the best available choice. He might not be able to do a 'Vajpayee' but he might do very well, even with his arrogance of sorts. Critics of Modi, might say that the pogrom that happened in Gujarat in the 2002 communal riots brands him as an anti-Muslim communist and stands out as the biggest example of his bad governance and administration. Okay, point conceded dear critics. As a rebuttal, I would like to make you aware of the fact that Mr Modi had been at the helm for no longer than 2 months when the riots started. And no CM, just two months old, would have been able to deal with it with strong actions right away. Can this be treated as an excuse to exculpate Modi - a blunt No. But should Modi be given a chance considering Gujarat has not witnessed any other incident of communal violence ever since - a welcoming Yes.

Modi's, arrogance and fearlessness, can also prove to be a big boon for the country, provided its channelized properly. Modi is the one who can take some serious steps in times of crisis with great audacity and conviction, he can re-establish India's dominance in the South East Asia and the subcontinent, propose India's ideas in the international zone and force leaders of other nations to mould or relax policies in India's favor.

But does all this make Modi, the best Prime Minister India could ever dream of - apologies but the answer is a NO yet again. Mr Modi has done some really good work in Gujarat. Not only has he made the state administration and bureaucracy almost corruption free, he has also helped Gujarat gain new industrial significance both in the country and abroad.  But the growth in Gujarat is not, as Nitish Kumar pointed out, all inclusive. The southern parts of Gujarat are blossoming and industrial activity is at its peak, but the drier parts of the state like Saurashtra are struggling. So if the Gujarat-model of development really work for the entire country is still a riddle. Those who champion Modi's idea of development fail to realize that 70% of India's population still resides in rural villages or rural suburbs.

But then again Mr Modi, any day, would be a better choice than the INC’s heir apparent – Rahul Gandhi. This scion of Indian politics’ first family has been remiss in his responsibilities for far too long. We cannot afford shirking of duties anymore. India needs a strong leader given that things are not panning out very well for countries around the world. And if there is no one better than Narendra Modi, we accept him with grace.

 Pseudonym : h!v

Disclaimer: The opinions presented in the article are author''s own. The author does not intend to promote any National Party/Candidate.

India vs USA

So who wins this battle - the battle of prestige and might of two of the largest and the most promising nations of the world. The United States has by far the highest annual GDP in the world of around $15 trillion. China, who just surpassed Japan is the second in the world in terms of GDP with an annual value of a little over $7 trillion. India, on the other hand,is way below at the tenth spot with an annual gross domestic product value of $1.66 trillion. India certainly does not even stand a chance of comparison with US when it comes to GDP value.
But there is one thing that India can confidently boost of and bank upon for its unprecedented progress - the number of young and vibrant brains it has. India is superior not only to US but almost to every other country in the world when it comes to the total headcount of the working population. The youth of India is one of its greatest strengths. The younger generation of India is ambitious and rearing to jump into the industry and do wonders to the Indian economy and to the world at large. Indian people, all around the world, have the reputation of being intelligent, sensible and hardworking. It would be a little too early to completely belittle India's past achievements and consider it out of the race to being one of the top nations of the world. India is a comparatively younger nation and its economy is still in the nascent stage.To call India 'just-a-developing-nation' at this point of time would be a mistake. India might be poor, but it has all the capabilities to grow into a world leader and dominate at the global stage. And this is because the foundations of the country and its economy were laid strong by its forefathers.
Today we might be mocked at for having a lower standard of living but the question really is - Can we guarantee that better standard of living is a measure of satisfied and happy living???
 People in US have an overall standard of living which is way above an average Indian. But we forget to notice the other part of the  story, an average American is mentally tensed and vulnerable to the American monetary systems and its policies. The entire system of reckless and exorbitant lending spree has spawned a never ending series of debts in the American financial system. An average American, no matter how hard he works and how meticulous he is in his expenses, is bound to sink deep in debts. He innocently enters into a several fathom deep powerful and inescapable black hole of indebtedness. These debts then go on multiplying year on year and sometimes even get transferred to generations.This is the horror face of 'rich' modern America.
On the contrary, an average Indian, though does not have all the pleasures in life but he knows his spending plan well. He does not spend exorbitantly, believes less in credit cards and other sources of plastic money, is more keen on saving or spending-on-savings(viz. insurance bonds, retirement plans etc.).
But in the US this lending monster has taken a modern face and is slowly laying its roots deep into the entire monetary system of the country. The lending in US is usurious.
How can we forget the recession that spell doom to thousands of people not only in the US but all across the world!!!
Not many people know, and even fewer would agree, but this recession was a direct consequence of what economists would call 'sub-prime-lending'. Because people were lent finances they didn't even deserve  or were incapable of paying it caused an increase in the amount of money floating in the market. Easy money teased people to buy large houses, and then began the house-buying spree.The real estate companies noticing the increase in people's spending power as well as demands went on to build too many houses. This caused the prices to plummet to the floor. Thus the bubble burst and the banks were not able to recover loans. The repercussions of these small defaults collectively compiled into a big package and passed on to almost every business entity in the US.
Thank God!!!
The 'lending' as well as the 'spending' in India is safe.We might always vent out our rage on the policy makers of the country for making 'people-unfriendly' policies, but out of the few things they do right, this is one of them. They have controlled the roaring animal in the Indian economy just as much it is required, and unleashed it slowly and slowly so that it makes its grip tight on the entire world and does not falter or fall down in haste.

Note: The figures quoted by the author are as per the IMF data 2012

Pseudonym : h!v