OF THE WORLD
Economists may scream GLOBAL RECESSION, but India is one
of the strongest economies in the world today!
The world's strongest economy, the United States, sank into
recession after 10 years of growth, which was the longest
expansion on record since the end of the II World War. The
global scenario has never been so depressed. Not since the
crash of '29. IMF-World Bank forecasts say the US, EU and
Japan may trigger a crash in world trade growth from 1.3%
in 2000 to just 1% in 2001. Amid such devastation, even as
some East Asian economies go into negative growth, India may
end 2001 with 4.5%. That catapults us to the top slot, after
China. And what's more, while China slows down from 7.5 to
7.1, India actually improves to 5.7.
Of 31 countries with a population of above 20 million, India
had the fourth highest growth of GDP in purchasing power parity,
after China, Korea and Thailand.
Is there a hidden resilience in the Indian economy?
Yashwant Sinha seems to think so. While exports drive the
Big Three - US, Japan and Germany - agriculture drives the
Indian economy. Much of the purchasing power comes from agriculture
and allied activities. 70% of the people form the backbone
of that power.
Apart from agriculture, the main contributor to India's stability
is its policy of not allowing foreign investors to enter volatile
areas such as real estate.
Says the latest IMF World Economic Outlook: 'India is relatively
insulated from the global slowdown, given the nature of its
IT sector (which is focused on services, where India remains
highly cost-competitive) and its relatively closed economy'.
So can we turn on the music? No. The government may
try to get maximum mileage out of this, but the fact remains,
we under-utilize our potential. If we achieved half the potential,
around 7.5%, we could become the fastest growing country by