All said
and done, in the last couple of months, there is no visible and apparent change
in India’s economic scenario. Literally, we have not witnessed any major
developments regarding infrastructure projects, job creations or even for that
matter any initiatives from the government that promotes the manufacturing and
services sector.
Inspite
of this, major rating bodies and multilateral funding agencies are pegging a
neat 8% projection for India’s growth in GDP! Strange as it may sound, now we
hear that the basis of calculating GDP has been changed to a more efficient
statistical one! What may seem like tweaking figures, as is practised in China,
is our government also heading that way?
Within a
time frame of 10 months, our GDP projections changed from 5.5% to somewhere
near 8% now. The Ministry of Finance’s economic survey projected a GDP growth
of 8% for 2015-16. And we further hear that ADB has now projected a growth in
GDP by 7.8% while Fitch’s projection is 8% for 2015-16!
Is not
GDP growth an indicator of a growing economy, an economy health indicator? In
that case, the purchasing power parity should increase too. Where do we see any
positive indicator, in our day to day lives, where India is on a roll?
In every
survey that we come across in the media or the internet, there is this uncanny
knack to link India’s growth with China’s! There are crucial
differences between the two economies which render such similarities as completely
superficial. The basic fundamental of both countries are different. India is a
capitalist economy while China is regimented and socialist. India is a more
liberal country while China is a state ruled country.
China’s GDP (USD 11
Trillion) is double the size of India’s (USD 4 Trillion). India’s GDP per
capita (USD 3900) is similarly smaller than China (USD 9300). The rate of unemployment
in China (6.5%) is much lower than in India (8.5%). China (USD 202 Billion) has
a higher current account balance than that of India (Deficit of USD 47
Billion). Then why compare? Let’s keep China aside.
Most economic pundits
are speaking of a vibrant Indian economy. They are mostly claiming that the
market size in 2015-16 will increase over 10% from 2012-13! Some say that India
is now the preferred investment destination with mergers & acquisitions
reaching USD 38 Billion in 2014! Big guys like the Boston Consulting Group have
said that India will become the 7th biggest country in the world in
terms of private wealth by 2017!
Furthermore the new
'Make in India' initiative is said to be a vital component in India's quest for
achieving further economic development. Everything sounds so hunky dory! We are
actually flying.
But who can run away
from the grim reality? We are plagued and mired in corruption. We are a very
populated lot. Our political class is busy at hitting and defending. And at
last but not the least, what the hell is happening to India’s hydro sector? What
happens to all the goody things we get to hear about having hydro as a clean,
green and sustainable source of energy?
There is not one
instance when the government has even thought of including any incentives for
hydro developers in the Union budget. With over 148 GW of untapped hydro
potential, India is just letting the water flow away! Literally!
Top it off with increase in diesel prices, hindered move on the Land Acquisition Bill, Unstructured R&R policy, slow movement on the manufacturing index?! Wow! Just where are we heading I wonder!
Disclaimer: I am no economist but am just frustrated.
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