India: turning gloomy
September 10, 2012 4:28 pm
by Amy Kazmin.
In the years following the global economic crisis, Indians remained overwhelmingly optimistic about the country’s future prospects, as economic growth remained resilient driven by the huge pent-up demand from within the country.
But over the last year, many Indians have lost faith in their country’s economic growth story, growing deeply pessimistic about the country’s future, as corruption scandals, persistent inflation and political bickering have eroded confidence in the Congress-led government.
A survey by the Pew Research Centre, conducted as part of its global attitudes project, found just 38 per cent of Indian participants were satisfied with the way the country was going, down a sharp 13 per cent from the year before.
The souring of the public mood coincides with deepening frustration in corporate boardrooms, both at home and abroad, about India’s business climate, with many company’s putting large planned investments on hold, or projects stalled by intractable problems on the ground.
“The economic euphoria in India over the last few years, inspired by the country’s seeming inevitable march towards double digit growth, has suddenly soured,” the study found. “In a world where the Americans, the Europeans and even the Chinese have reasons to worry, it is the Indians who have lost the greatest faith in their economic fortunes.”
Pew researched conducted more than 4,000 face-to-face interviews in eight different languages in 13 of India’s 15 most populous states, and subjects were chosen across the economic spectrum.
Just 49 per cent of those surveyed surveyed felt that the economy was in good shape, down from 56 per cent last year, while only 45 per cent said they expected the economy to improve in the next year, down from 60 per cent in 2011.
“Today, Indians’ evaluation of their current economic circumstances trails that in China by 34 percentage points, and Brazil by 16 points,” the study found. “Indian satisfaction with the direction of the country is descending towards (levels) in Europe and the United States.”
The study added that people in the US were more hopeful about their future than people in India, where two-thirds of the respondents said they thought it would be difficult for their children to get a better job, or be wealthier than the current generation.
Such a bleak assessment reflects what some describe as extreme and highly emotional swings in the national mood in India. At times when the economy is growing robustly, many Indians tend to gloss over the magnitude of the social and economic challenges that the country still faces. And when conditions have turned tougher, the mood has blackened perhaps more than is warranted.
Dheeraj Singh, the chief strategy officer in South and Southeast Asia for Grey, the advertising agency, said he believes the current pessimism in India is overdone.
“India is not going through such a bright time either in terms of the economy or politics, but I wouldn’t say the mood on the ground is so bad. If you walk into any restaurant or any shopping area and mall, people are still out there. What we are talking about is the rate of growth that has gone down, but growth hasn’t vanished. We are still selling at healthy rates.”
Perhaps when India starts to see a renewed pickup in growth, and a stronger sense of direction on the political front, the mood will settle somewhere in healthier territory, with appreciation for the country’s progress, combined with a sober assessment of the many challenges that lie ahead.
India: turning gloomy | beyondbrics
