‘GDP likely to average 6.5 % over next five years’

[sancho]

-We failed to reduce our bureaucratic bottlenecks.

-Corruption is still rampant in each and every govt. department.

I'm sad to say, but that's India! Bureaucracy and corruption goes hand in hand and I don't expect that to change with an NDA government either. India has changed between Congress and BJP so often, but these problems remained, that's one reason why I hoped that the AAP might come up as a reasonable 3rd party, that actually could change something in India. Not because I support their policies, but just because I hoped for a real change of these 2 problems.

Our exports constitute 20-25% of GDP for past one decade. As we were growing our exports also grew. at least we kept pace with our exports even when the world economy was in trouble.

The world economy is one thing, the world financial status is another. Germany as a country could have lower economic growth for example, but the FDI from Germany to India could still be high, because of the potential of the Indian market in the long run, which makes companies invest. But in times where the countries have to save money wherever they can to keep depts under control, where most world currencies are in trouble, companies tend to keep their money tied and don't invest.
We can see that even in India in the last years, look at the take over run TATA and other Indian companies made all over Europe during UPA 1, but then the crisis years came and they stopped investing too much in other markets. We will see FDI to India rise again, unrelated to the GDP growth of India, simply because the there is a lot of money available in the world to spend and India still has a great potential, while China doesn't look that attractive anymore.

 

[Chinese-Dragon]

India is not the middle of the world, but is effected by the world! Since 2008 we are living in a world of banking and financial crisis, in which India was one of the few countries, that could retain a constant growth. In times when even developed countries like Germany were applauded for 1-2% growth, in India everybody is crying about 4-5% and now when all predictions (not only of UPA's) shows that growth gathers speed again and we will see 6% and more in the the coming years, we don't even realize that that's a GOOD thing!!!

For those who didn't realised it, even China's growth is down to 7.5% this year and possibly less by next year, also a result of lack of governance and policy paralysis?

The reality is, that India did fairly well in the crisis years and now when the world is recovering, when their depts are under control, which makes them spend more into India and buy more from India, growth will make a jump again. But we were so used to 8-9% growth charts, that we only complained about growth reductions without looking or even understanding why the growth or FDI went down. In fact, no matter who wins or will be PM, will benefit from the gobal recovery without doing anything and even from the policies of the UPA in the crisis years that kept India stable. That's why growth is increasing, why the Rupee is coming back, why every foreign analyst suggest to invest in India again and shows the potential of the market.



China's GDP growth to slow to 7.5% this year: IMF - Channel NewsAsia

There are problems of course, inflation, price rise, infrastructure that needs improvement, we tend to see everything either completely as bad, or as very good in an overenthusiastic manner. There are a lot of good things that UPA has got India, there will be good things that NDA will bring India and both will have their bad sides too and that's something we often don't see. The other side, or in some cases (defence procurement and production) the better middle way!

You're forgetting about economic base size.

7.5% growth of a $9.3 trillion base economy is huge. We are adding far more to our economy now than ever before, even when we were growing at 12% of a $2 trillion economy.

And Germany is on a different level, with their per capita GDP they are fine with 1-2% growth. But for China our GDP per capita (nominal) is only about $7000, we NEED higher growth.

India at its current stage of development should be growing at double-digits. But they are not. Why?

I don't believe the argument that democracy is some kind of "weakness". Nor do I believe that any race or culture is intrinsically superior or inferior when it comes to economic performance.

So the only thing left to blame is Indian governance, specifically the administrative and economic "systems" that have led to so much inefficiency. Systems must constantly be reformed to keep up with the changing world, hopefully if Modi comes to power with a strong mandate, he can push through the economic reforms that India needs.

 

[sancho]

You're forgetting about economic base size...
...India at its current stage of development should be growing at double-digits.

No I am not, because the point was not how big the economy is, but how the last few global crisis years had effected growth. Here the fact is, that even Chinas growth is shrinking, just like Indias, or all the others economies in the world, but with the difference that we still have good growth, just not great growth anymore like before the crisis. Without the crisis (or inflation), India would be easily in the double digit area today too, so the effect of the crisis is the main limiting factor, be it for China or India and not the difference of the governance.

 

[Chinese-Dragon]

No I am not, because the point was not how big the economy is, but how the last few global crisis years had effected growth. Here the fact is, that even Chinas growth is shrinking, just like Indias, or all the others economies in the world, but with the difference that we still have good growth, just not great growth anymore like before the crisis. Without the crisis (or inflation), India would be easily in the double digit area today too, so the effect of the crisis is the main limiting factor, be it for China or India and not the difference of the governance.

Countries with lower base economies will find it easier to grow at double-digits, because they have to add less to their economy every year to achieve that percentage.

Look at Mongolia or Afghanistan for example. It's easy for then to grow at double digits because their base economies are so small, they don't have to add much.

Whereas China, we went from $8.2 trillion to $9.3 trillion in only one year, in order to grow at 7.5% we have to add 1 trillion every year.

India with a smaller economic base size should be growing at a faster "percentage" growth rate than China, because you have to add so much less to achieve it. But that's not happening.

The reason, in my opinion, is not democracy or culture or any of that, but rather an administrative and economic system that generates too much inefficiency.

And Modi is the only Indian leader that seems determined enough to push through deep-rooted reforms of the Indian economy. Which is the ultimate solution to this problem.

 

[godofwar]

No I am not, because the point was not how big the economy is, but how the last few global crisis years had effected growth. Here the fact is, that even Chinas growth is shrinking, just like Indias, or all the others economies in the world, but with the difference that we still have good growth, just not great growth anymore like before the crisis. Without the crisis (or inflation), India would be easily in the double digit area today too, so the effect of the crisis is the main limiting factor, be it for China or India and not the difference of the governance.

We never had double digit growth before before 2008.

How can you claim " India would be easily in the double digit area today, without the crisis" ?

 

[UKBengali]

I have said this many times before but it needs to be repeated again...

India is a multitude of nations that is a legal entity.

It is easy to blame Congress for India's failures but just the fact that it has not disintegrated should be something to celebrate.

India can only hope to grow at best in the range 7-8% with good governance. Double-digit growth is not possible for India ever.

 

[Omega007]

Understood what you are trying to say ...

There is a lengthy joke about " Two Cows" situation ....


This is Goldman Sachs situation :


" You have two cows.

You sell three of them to your publicly listed company, using letters of credit opened by your brother-in- law at the bank, then

execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.

The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority

shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight

cows, with an option on one more. You sell one cow to buy a new president of the United States, leaving you with nine cows. No

balance sheet provided with the release. The public then buys your bull "

That was awesome dude,simply put....hilarious.

 

[ziaulislam]

Not a good idea to compare India growth with mature economies Luke Korea,Japan and Germany. Even if they clock zero growth its no big deal as they have already reached desire growth level.
India slow growth is alarming but real issue is high current account deficit,lower exports as compared to imports, moving towards a more consumption based economy

 

[karan21]

This subdued growth is a consequence of negligence of export oriented industries and over focus on domestic consumption. India is yet to explore industries that drive Asian economies. Shipbuilding, Electronics manufacturing, infrastructure and construction are prime examples.

These industries wont be able to achieve their full potential unless we reform out banking sector, implement unified taxation system and making clearance policies easier.

A third front will take Indian to shambles period, so anyone here voting for JDU, AAP, Trinamool congress, CPI, for the sake of Mother India DON'T....

Can Modi do it?? I don't know, but congress had 10 years they couldn't.

 

[sancho]

We never had double digit growth before before 2008.

How can you claim " India would be easily in the double digit area today, without the crisis" ?

Because we hit the 9% before the banking crisis in 2008 and although we came out reasonably good of that crisis, the later global finacial crisis hit us far stronger:

When you look at similar charts for China, or other countries, you will see the same downfall around 2008 and 2012, because the global effects of the crisis years and not because Indian economy policies were bad. There are internal problems for sure too like inflation, but we can't just blame the current government and beliving that the slow down is only an Indian problem and caused internally, while the whole world is suffering from the same problems, in the same timeframe and even far worse than India does!
Without these external problems, Indian economy would stand far better today, which shows that India is not only benefiting from globalisation, but also can be effected in a bad way from it.

 

[godofwar]

Because we hit the 9% before the banking crisis in 2008 and although we came out reasonably good of that crisis, the later global finacial crisis hit us far stronger:

When you look at similar charts for China, or other countries, you will see the same downfall around 2008 and 2012, because the global effects of the crisis years and not because Indian economy policies were bad. There are internal problems for sure too like inflation, but we can't just blame the current government and beliving that the slow down is only an Indian problem and caused internally, while the whole world is suffering from the same problems, in the same timeframe and even far worse than India does!
Without these external problems, Indian economy would stand far better today, which shows that India is not only benefiting from globalisation, but also can be effected in a bad way from it.

All that says is we achieved 8-9% percent grwth even in the best of times.
How can you conclude we would easily be in double digit growth if not for 2008 crisis
Key word being easily.

BTW whats your opinion on UPA handling of the economy and various sops like MNREGA and Food Security Bill ?

 

[A Town]

I have said this many times before but it needs to be repeated again...

India is a multitude of nations that is a legal entity.

It is easy to blame Congress for India's failures but just the fact that it has not disintegrated should be something to celebrate.

India can only hope to grow at best in the range 7-8% with good governance. Double-digit growth is not possible for India ever.

This is coming from the guy who says that Bangladesh will become a world leading economy in 24 years.
If we wanted amateur Bangladeshi lungi analysis of our country we would have asked.

 

[UKBengali]

This is coming from the guy who says that Bangladesh will become a world leading economy in 24 years.
If we wanted amateur Bangladeshi lungi analysis of our country we would have asked.

I think I said that BD would be middle-income in 24 years.

Anyway, please spend your time worrying about the millions of Indians that starve to death every year after nearly 7 Decades of independence.

 

[NKVD]

I think I said that BD would be middle-income in 24 years.

Anyway, please spend your time worrying about the millions of Indians that starve to death every year after nearly 7 Decades of independence.

Omg look at this LungiIf India is in So bad condition why is our Country is Pradise for Lungis ImmigrantsStop your little Rants Lungi Living on Our Charity Made your Skin very thick Wait for modi to come to power He give you little beating you disurve Lungis

 

[UKBengali]

Omg look at this LungiIf India is in So bad condition why is our Country is Pradise for Lungis ImmigrantsStop your little Rants Lungi Living on Our Charity Made your Skin very thick Wait for modi to come to power He give you little beating you disurve Lungis

Like I said please start worrying about the millions of your starving countrymen.

BD economy is growing nicely with double digit export growth and the economy should grow at least six per cent this year.

Future is looking rosy for BD