Challenges of the current Indian economy

December 8, 2010 By Leave a Comment
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The year 2010 showed an optimistic beginning for the Indian economy. 2009 ended with 18.5% growth rate in the manufacturing sector, which was the highest in the last twenty years. The anti-crisis measures that India took as a counter step for the financial downturn proved her resilience. The economic forecast for the current year and future is promising. But this optimism is halted by the challenges that are imposing on the Indian economy.

In the budget of 2010-11, the financial minister has outlined three main challenges that the present Indian economy faces. The first challenge is to get India back on the right track of growing GDP. The target is to reach at least the 9% growth rate, so that achieving double-digit number GDP will seem real and feasible. The second concern that India has to tackle is to bring about a more inclusive government wherein no individual or community is denied an opportunity for growth, and where everyone gets the growth benefits. The third challenge, and the most difficult one perhaps is to address government loopholes at different strata, to improve public services, and to perk up delivery mechanisms.

Other than these challenges, of course there is inflation always threatening to bring the Indian economy down. Food price rise due to failed monsoon, gas, petrol and diesel price hike result in an economic spiraling effect.

All these challenges call for a change in the reform policies. The immediate step that India has to take in order to fight these challenges is to consolidate its growth. There is an urgent need for appraisal of public spending, and to mobilize resources so that it can bring about economic productivity. The stable government and its continued steady performance, and the high domestic savings and investments in the recent years are indications of the growing Indian economy.

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Can you hear me now?

December 7, 2010 By Leave a Comment
Mobile phone evolution

When many sectors slowed down due to global financial downturn, the Indian telecom industry has recorded a steady growth. In reality, it has been one of the major contributors to the growth of the Indian economy. The Indian telecom has the best penetration into the consumer market, covering both rural and urban India with unbeatable low tariffs, in turn contributing to the economic growth. In the year 2009, cell phone companies switched from per minute billing to per second billing and that says about the competitiveness in the mobile sector.

Half the people in India may not have proper sanitization, but still owns a mobile phone. A more accurate data reveals around 545 million people have mobile connection, and roughly 366 million people do not have proper toilet. Yet, the statistics or the real situation has not stopped her from becoming the largest mobile service provider, second only to China. The cell phone industry has changed the face of India. It has transformed the way people speak, and connect. From finding a job to hearing astrological predictions, from finding a house to paying your monthly bills, mobile technology has changed the way Indians talk, breathe and move.

In February 2010 alone there were 20 million new mobile connections. Even in rural India where there is not much money seen, mobile phones have come to be a permanent object in their hands.

The entry of 3G and WIMAX technologies opened opportunities in terms of employment and also with respect to bringing home revenues.

The rapid growth of the telecom industry has helped in contributing to the growth of India GDP. By 2010, there are 612 million people expected to get mobile subscriptions accounting for 51% Indian economic growth rate. It is expected to generate revenues close to USD 43 billion by the end of this year. And, that is no tall order for such a ubiquitous industry. Once this sort of revenue is generated in the industry, the Indian telecom sector will vie with Mexico which has produced one of the richest men in the world, the indomitable Carlos Slim Helu.

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India Vs. Chinese economies

December 4, 2010 By Leave a Comment

Even from a historical point of view the Chinese economy has proved its mettle against India time and again. While India had almost 200 years of British suppression to blame for its lagging economy, China on the other hand has always been its own master in planning and implementing its economic policies. The British vacated only after draining all of India resources, whereas the Chinese had its natural and human resourced intact, making it an economic superpower far quickly in the game.

Consider this. China is the third largest economy with respect to exchange rates, and India holds the 12th position. China has an average 7.8 trillion GDP, while India shows 1.2 trillion GDP and the per capita GDP of China is $6,100, while that of India is $1016. So, where does the difference lie?

There are many factors that have given the Chinese economy a winning streak. For instance, both China and India are basically an agricultural land. And yet, while India is still weighed down by traditional and outdated methods of cultivation, the Chinese have successful incorporated technological innovations into their agricultural methods. As a result, the quality and quantity of the produce is very high. Another difference that has resulted in China better economy is the liberalization policies. It was more than 10 years after China had brought in the privatization and globalization policies that India woke up to its own liberalization. By which time, China had increased her GDP considerably by welcoming foreign and private investments.

Then another point of difference is India still does not have an infrastructure that she can boast of, although she is on par with her neighbor in manpower. China communication, health care facilities, civic amenities etc., which have a positive impact on its economy are much better than India. But, India is showing promising indications. Her resilient nature, standing her ground during the financial fall out has made the world look up to her. Between China and India, the latter has emerged far less hurt due to financial downturn.

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