Foreign investors are increasingly fewer, local investors have decided to go to markets with more potential, and the population’s poverty deepens. In short, a tragedy. This happens with the second country in the world by number of inhabitants, the British weekly The Economist concludes. Indian entrepreneurs leave the market because of the stifling bureaucracy. Despite the large number of people and over a hundred languages, India refuses to die. Analysts describe it as a superpower in waiting, even if the economy fell.
Some investors still stubbornly believe in the potential of public sector: thanks to numerous demographics, hundreds of millions of Indians could escape poverty with a job. India’s economic growth fell to 6.1% last quarter. Asian government says that in the first quarter of this year India will not register a growth above 7%. Corruption, bureaucracy and counterfeiting are among the factors that led to the slowing economy, according to The Economist. Government of India seeks to stimulate the economy by increasing local budgets for administrative improvisation to be considered as genuine reforms that raise economy.
There is no doubt that Indian economy is growing. But its economic trajectory angle decreased. It grew slowly, by 6.1% last quarter. Even if, according to government expectations, it jumps back, many people worry that the growth trend will not be higher than 7%. No doubt, business stagnate in India, and the investments are decreasing. Moreover, corruption is at the highest level: in the last general election, so many notes were forged that economists could not explain the large number of liquidity in the banking system. Government did not address long jams, and because of that, inflation is high.
Each issue of this kind which includes state authorities puts a serious mark on the economy in the coming years. Indians hope was until recently the private sector. More specifically, Europeans to pump money into the businesses of the Asian market. Loans in recent years (India has an overall fiscal deficit approaching a tenth of GDP) have only stifled the private sector and the central bank of India was seen in inability to reduce interest rates.
Indian politicians argue that economic growth of 6% or 7% is much more for their country than for others. And are happy with that. As is said about China that it needs 8% growth to maintain social stability, probably India needs a growth of 6% or slightly more to maintain its financial stability. A growth under 6% of the Indian economy would make foreign debt harder to bear for the Asian country and would lead to lower foreign capital that India badly needs. If a rich state may be disappointed that has not reached its potential, for India, a country full of poor people who need jobs, this is a tragedy.
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