The cumulative growth for the period April- December, 2010-11 stands at 8.6% over the corresponding period of the previous year. Month on Month growth is 1.6% higher as compared to the level in the month of December 2009.
The December industrial output was always expected to show growth but at a moderate level as the Dec 2009 output was extremely strong.(i.e. calculation of the index from a higher base of Dec 2009)
Overall Indian growth story is intact and continues to be Strong
Thursday, February 10, 2011
Sunday, February 6, 2011
India's Growth
India is a great nation. No doubt about it. Even its enemies acknowledge it. If you go back to history, you can always see that India was the magnetic attraction of the world. Alexander the Great had only one dream, reach India and he did. He defeated one of the Indian Kings, Porus in a battle, however returned his kingdom and established friendship and went back. That was the respect he had for the king and kingdom.
Romans, Chinese, Arabs and a host of other nations vied to come to India for trade and make money. Migration to India was like the migration to west these days. Parsis, Middle East Christians and Muslims all migrated to India in the past. If you visit Kerala state still you can see the evidence of thriving Jewish culture for thousands of centuries, till Israel is formed, however the way things are going at Middle East, it is possible that some Jews may return. Chinese fishing net popular in Kochi shows the historical connections to the China.
Then the west was desperate to come to India, which they did through Vasco Da Gama, which changed the fortunes of the west for ever. A plague ravaged poor nation of Britain came the mighty nation of the world due to the trade with India. No doubt India has tremendous potential.
Even now, if you go to USA it is acknowledged that the most thriving immigrant community is the Indians. They top the list of non-westerners as the CEOs of Fortune companies and in similarly in all spheres of life,
There is no need to elaborate further, it is beyond any doubt that India has great potential and Indians abroad have established their hall mark.
Indian growth story was strong till Oct 2010 and almost all economists told that India will grow at 10% p.a very soon, possibly in FY2011. Everything changed all of a sudden as we started 2011, now many are busy cutting the Indian growth rate. We don't hear anyone even stating even 10% now. WHY?
This is because Indians are capable screwing up good things. It seems that they dislike good things. As the growth was zooming, the CBI suddenly decided some of the top banks have made 'corruption' in lending huge sums of money to the business world of India. They put the top bankers behind jail. Well I don't justify their action, but has a question. It is well known that there are many corrupt politicians in India. How many of them are humiliated the way the top bankers have been humiliated?
Bear in mind that Indian Bankers are top class and comparable to the best in world. Although they are as talented or even more talented than the rest of the world, their salaries are pittance compared to the rest of the world. A junior associate in Goldman Sachs may be drawing more salary than the CEO of SBI, which is among the Fortune 500 of the world!
What did CBI achieved with this raid? Has the corruption been routed out? No. But many bankers became now afraid to lend after the raid. This has impacted the businesses across India. Somewhere in India, an expansion plan is on hold. Some businessmen are unable to fulfill their growth forecasts and bank officials are gripped with fear. The cumulative effect of several such instances means that growth of India gets affected!
Then came CAG report that an astronomical amount was subjected to corruption in 2G scam. Then some minister came out and said that the assumptions by CAG may not be appropriate. There was a huge argument in the press, diverting attention from the new economic activities that should have been focused by Govt. Even the parliament did not meet peacefully to discuss the country's affairs. Negative publicity is an inevitable consequence.
After this incident many government departments are reluctant to approve projects as the fear grips them. The result is that several Infrastructure projects (road construction, etc) by government departments are put off. Again, the slowdown in such big projects may make a dent in the growth of India!!
India's environment minister seem to enjoy the lime light of the media. Several Projects are denied or made costlier for the promoters by him. The best example is the Lavansa Project, which covered about 20000 acres and would have created truly modern facilities. Imagine the amount of investments flowed into the economy and its multiplier effect and accelerator effect. Remember USA's rejection of certain environmental treaties if it hurts their economic growth. Earth, during its existence, tracable back to millions of years, has already gone through several ice-ages and hot-ages and will continue to do so going forward. Whilst we should care for the environment, it should not be at the cost of economic growth. (With the demand factor high in India, the annual growth rate of 10% is a low hanging fruit).
Now it is the turn of prime minister and finance minister. Recently, the prime minister said that the inflation will affect the growth because interest rates may go up. The rates are already high in Brazil and it grows. Moreover, the rates will not remain high for long. India is planning to import food stuff to curtail the food inflation. These positives were not mentioned! Whilst all agree that Indian prime minister is among the best in the world and highly intelligent and knows how to take India’s growth to 10% or above, he need to be careful when tackling media
Need to learn from Obama and Warren Buffet. When they speaks about the US economy, they are optimistic, however bad the economic numbers may look like. They know that these numbers are temporary. The duty of the commander or a team leader is to be positive and motive the team, not otherwise. When the nation’s leaders are optimistic, the business confidence grows. This encourages more investments, capex, expansion plans, etc which will benefit the economy and brings in the growth.
The truth is that India is growing faster than most economies in the world (except may be China, but whose numbers are accused to be fudged) and there is no reduction in its pace. India will continue to grow at even faster rates than at present. If the stock market drops in India, lick your lips and barge in like a kid in a candy store.
Romans, Chinese, Arabs and a host of other nations vied to come to India for trade and make money. Migration to India was like the migration to west these days. Parsis, Middle East Christians and Muslims all migrated to India in the past. If you visit Kerala state still you can see the evidence of thriving Jewish culture for thousands of centuries, till Israel is formed, however the way things are going at Middle East, it is possible that some Jews may return. Chinese fishing net popular in Kochi shows the historical connections to the China.
Then the west was desperate to come to India, which they did through Vasco Da Gama, which changed the fortunes of the west for ever. A plague ravaged poor nation of Britain came the mighty nation of the world due to the trade with India. No doubt India has tremendous potential.
Even now, if you go to USA it is acknowledged that the most thriving immigrant community is the Indians. They top the list of non-westerners as the CEOs of Fortune companies and in similarly in all spheres of life,
There is no need to elaborate further, it is beyond any doubt that India has great potential and Indians abroad have established their hall mark.
Indian growth story was strong till Oct 2010 and almost all economists told that India will grow at 10% p.a very soon, possibly in FY2011. Everything changed all of a sudden as we started 2011, now many are busy cutting the Indian growth rate. We don't hear anyone even stating even 10% now. WHY?
This is because Indians are capable screwing up good things. It seems that they dislike good things. As the growth was zooming, the CBI suddenly decided some of the top banks have made 'corruption' in lending huge sums of money to the business world of India. They put the top bankers behind jail. Well I don't justify their action, but has a question. It is well known that there are many corrupt politicians in India. How many of them are humiliated the way the top bankers have been humiliated?
Bear in mind that Indian Bankers are top class and comparable to the best in world. Although they are as talented or even more talented than the rest of the world, their salaries are pittance compared to the rest of the world. A junior associate in Goldman Sachs may be drawing more salary than the CEO of SBI, which is among the Fortune 500 of the world!
What did CBI achieved with this raid? Has the corruption been routed out? No. But many bankers became now afraid to lend after the raid. This has impacted the businesses across India. Somewhere in India, an expansion plan is on hold. Some businessmen are unable to fulfill their growth forecasts and bank officials are gripped with fear. The cumulative effect of several such instances means that growth of India gets affected!
Then came CAG report that an astronomical amount was subjected to corruption in 2G scam. Then some minister came out and said that the assumptions by CAG may not be appropriate. There was a huge argument in the press, diverting attention from the new economic activities that should have been focused by Govt. Even the parliament did not meet peacefully to discuss the country's affairs. Negative publicity is an inevitable consequence.
After this incident many government departments are reluctant to approve projects as the fear grips them. The result is that several Infrastructure projects (road construction, etc) by government departments are put off. Again, the slowdown in such big projects may make a dent in the growth of India!!
India's environment minister seem to enjoy the lime light of the media. Several Projects are denied or made costlier for the promoters by him. The best example is the Lavansa Project, which covered about 20000 acres and would have created truly modern facilities. Imagine the amount of investments flowed into the economy and its multiplier effect and accelerator effect. Remember USA's rejection of certain environmental treaties if it hurts their economic growth. Earth, during its existence, tracable back to millions of years, has already gone through several ice-ages and hot-ages and will continue to do so going forward. Whilst we should care for the environment, it should not be at the cost of economic growth. (With the demand factor high in India, the annual growth rate of 10% is a low hanging fruit).
Now it is the turn of prime minister and finance minister. Recently, the prime minister said that the inflation will affect the growth because interest rates may go up. The rates are already high in Brazil and it grows. Moreover, the rates will not remain high for long. India is planning to import food stuff to curtail the food inflation. These positives were not mentioned! Whilst all agree that Indian prime minister is among the best in the world and highly intelligent and knows how to take India’s growth to 10% or above, he need to be careful when tackling media
Need to learn from Obama and Warren Buffet. When they speaks about the US economy, they are optimistic, however bad the economic numbers may look like. They know that these numbers are temporary. The duty of the commander or a team leader is to be positive and motive the team, not otherwise. When the nation’s leaders are optimistic, the business confidence grows. This encourages more investments, capex, expansion plans, etc which will benefit the economy and brings in the growth.
The truth is that India is growing faster than most economies in the world (except may be China, but whose numbers are accused to be fudged) and there is no reduction in its pace. India will continue to grow at even faster rates than at present. If the stock market drops in India, lick your lips and barge in like a kid in a candy store.
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