After several years of rapid growth, 2009, will prove a testing year for India.
Inflation Inflation continues to pose a threat. Inflation peaked at 12% in early August ’08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices and higher interest rates will reduce inflation without causing too much of a slowdown.
Economic Growth. After reaching growth of 9.8% in 2007/08, growth is expected to slow down to 7%. This might not be a bad thing as it will avoid inflationary pressures building further. However, some worry the global credit crunch could reduce growth much more.
Global Recession and Indian Economy. It appears that Europe, Japan and the US are entering into recession. Falling house prices, crisis in the financial system, and lower confidence could lead to a sharp downturn, with the worst still to come.
Many argue, that India’s growth is not so dependent on growth in the West. However, the Indian stockmarkets have been hit by the global crisis. India’s growing service sector and manufacturing sector would be adversely impacted by a global downturn. However, I still feel that India’s economic success is not dependent on growth in the West, and at worst India’s growth rate will be less than hoped for.
The Indian government still have a target of 10% growth for 2010/11, but, I think this could prove unrealistic.
Challenges for Indian Economy in 2009
- Getting inflation under control
- Spreading the benefits of growth more equitably.
- Completing investment projects which are essential for long term development of economy.
- Dealing with global financial uncertainty, which will make capital flows and exports more difficult.
Sensex in 2009
After falling in 2008, the Sensex could offer one of the best returns for global stockmarkets. India’s strong economic growth will buck the global trend for lower growth.
Indian Rupee 2009
The Indian Rupee has had a surprisingly weak year. The Rupee has fallen from 39 Rupee to 1$ in January 2008, to 44 Rupee in September. Real interest rates in India are still negative, but, if the Indian inflation rate is reduced, and the government resist the temptation to go all out for growth, the Rupee may rebound, at least against the dollar, which will face more difficulties in 2009
Indian Economy 2010
More on Indian Economy
- Indian economy set to grow despite downturn – Indian Reuters
- Indian economy – wikipedia
- Problems facing Indian economy
About The Author
we r fortunate that we r growing in india n also that our economy growing so fastly that we will b at position 2 by 2020. so friends do work always.
I think recession is the right time for investment in traditional businesses i.e agriculture, food etc etc. This is also the right time for the government to implement and identify the instruments to control the economy, inflation and interest rates. By investing in the implemention of services & instruments for the control of economy, incorporating & modernising public health system, modernisation of policing,implementation & upgradation of key public sector projects i.e dams, roads, motorways, powerplants, railways, it is posible to boost the demand which can eventually kick start the economy. Indian economy is easily being affected by changes in the agriculture industry. This is a great instrument in controlling the economy. By boosting & modernising and implementing the logistics in this sector this country can acheive a lot.
Indian government has to developed plans which crack indian recession. Specially for IT industry. Why we are outsourcing. India having a biggest IT talent peoples. Why we are not using China concept. They are working under the same flag.
Lower corruption, transparency in politics, stable & responsible government, solid infrastructure, secure borders, balance protectionism with foreign investment, become self sufficient in energy/power especially green & renewable sources, Green Sustainable policies geared towards the environment & climate, assist home corporations to compete effectively on a global scale – Implement all above & can expect economy to overtake US
Indian economy has a long way to go and face the heat of the global reccession.what now for the Indian economy should be to find out the ways and means to survive, not to keep on blaming the recession.
indian econome is down compare to previous year.