In last few years, India's growth story has suffered a serious setback. From around 9%+ GDP growth...and expected to enter double digit...it has, instead crashed to around 5% levels.
Some quarters have been blaming the global economic crisis for India too suffering such a dramatic fall.
However, I wonder...
a) We have new power plants ready to be commissioned but cannot to do. Many old plants are running at very low capacity utilization. The sole reason for this is shortage of coal. No, it isn't as if India doesn't have sufficient coal...but because we are not mining enough coal. No power means no business, and hence no addition to GDP. What has international economics to do with this? Nothing.
b) Roads are the lifeline of any economy. New road construction has simply stalled. No new roads means no economic growth, and hence no addition to GDP. What has international economics to do with this? Nothing.
c) Corruption has affected the growth in telecom sector. Communication is key to economic growth. That too has been stalled, and hence no addition to GDP. What has international economics to do with this? Nothing.
d) KYC norms should be such that it brings many people within the banking and financial net. But we are going the opposite way. Too restrictive and without any compatibility across different financial products, this has in fact excluded lot of genuine investors. With no options available, they have turned towards gold - an unproductive asset for the economy and a burden on India's foreign exchange as we have to import gold. What has international economics to do with this? Nothing.
e) Frequent and retrograde changes in taxation; RBI's too much tightening of the interest rates; too much delay in reducing the rates as growth engine slowed down...again too bad for the economy. What has international economics to do with this? Nothing.
If only these problems were addressed soon. I am sure this would give at least 2-3% additional growth. Then, our situation wouldn't be as pathetic. Yes, we would be impacted by global factors...but not so badly.
By the way, given India's many advantages, we can not only pull ourselves out but the world also from this financial mess. We can be America of tomorrow...if only we get the right man or woman to lead our country...someone wise and intelligent like Vajpayee or Narsimha Rao.
Some quarters have been blaming the global economic crisis for India too suffering such a dramatic fall.
However, I wonder...
a) We have new power plants ready to be commissioned but cannot to do. Many old plants are running at very low capacity utilization. The sole reason for this is shortage of coal. No, it isn't as if India doesn't have sufficient coal...but because we are not mining enough coal. No power means no business, and hence no addition to GDP. What has international economics to do with this? Nothing.
b) Roads are the lifeline of any economy. New road construction has simply stalled. No new roads means no economic growth, and hence no addition to GDP. What has international economics to do with this? Nothing.
c) Corruption has affected the growth in telecom sector. Communication is key to economic growth. That too has been stalled, and hence no addition to GDP. What has international economics to do with this? Nothing.
d) KYC norms should be such that it brings many people within the banking and financial net. But we are going the opposite way. Too restrictive and without any compatibility across different financial products, this has in fact excluded lot of genuine investors. With no options available, they have turned towards gold - an unproductive asset for the economy and a burden on India's foreign exchange as we have to import gold. What has international economics to do with this? Nothing.
e) Frequent and retrograde changes in taxation; RBI's too much tightening of the interest rates; too much delay in reducing the rates as growth engine slowed down...again too bad for the economy. What has international economics to do with this? Nothing.
If only these problems were addressed soon. I am sure this would give at least 2-3% additional growth. Then, our situation wouldn't be as pathetic. Yes, we would be impacted by global factors...but not so badly.
By the way, given India's many advantages, we can not only pull ourselves out but the world also from this financial mess. We can be America of tomorrow...if only we get the right man or woman to lead our country...someone wise and intelligent like Vajpayee or Narsimha Rao.
