subject: Churning Of Economic Optimism And Pessimism [print this page] The Reserve Bank of Indias monetary policy for the next quarter, soon to be announced, is under speculation. Guesswork in the economic circles is considered a healthy pastime, and so it is no surprise that anybody who has even a tad of interest in these matters has begun to discuss two extremes would the policy-to-be-announced accelerate growth or would it prove to be a damp squib?
Lets balance the perspective of the brigade of hopefuls and not-so-hopefuls. Since the government took two politically difficult decisions last month increase in diesel price to address budgetary deficit and allow FDI in several sectors to open a door for new investment the hope in governments ability has returned even though it may not be the decisive push. FDI wouldnt come overnight and, so, new opportunities may have to wait. With increased inflation, the demand would recede and the recession would set in. still, the decision to reduce budgetary deficit would be said to be a good call.
Attracting FDI by relaxing many rules is presently one choice with the government to bet on. But how far this would really revive on the ground is a million dollar question whose answer is wrapped under the mystery of future. Presently, what we have on the table is pretty scary conduct of economy in the last two and a half years primarily owing to inaction of policy makers and lastly, or rather for excuse sake, owing to global slowdown.
Sadly, the trouble has taken deeper roots. The stock market despite having jumped recently stands on shaky grounds. Some companies which have borrowed money abroad are struggling to meet commitments in this regard. This is not a healthy situation to instill confidence in foreign investors. However, in the financial world occasional defaults of one company or the other does not dampen the spirit of investment, especially when there is an opportunity galore which indeed is there in India.
By a popular estimate within country investment has fallen by half in a year. The bloom of Investment in infrastructure, which is the backbone for the progress of a county like India, has also withered.
The irony is that not only India but the entire Asia Pacific region is considered the growth driver of global economy. India has become third largest economy in Asia and it is rated over China for being the practitioner of democratic polity. If one government, admittedly under compulsion of coalition and appeasement politics, takes some unfavorable decisions against economic growth, there is always an option that new regime would take over and unleash the corrective measures. Growth opportunities just dont die due to bad polity. Bad decisions or, for that matter, no decisions may stifle the growth but cannot snuff it out.
Indopac Summit is an important platform where the top economists, analysts, and politicians of the world voice their assessments pertaining to the future growth of economy in the Asia Pacific region countries. A boon for financial planners, businessmen, and investors, the annual event of Indopac Summit would take place in New Delhi this year on 26th November.
