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Rajan Ahuja
C/o Realty & Verticals
J4/2, DLF- II , Gurgaon
e mail :-
rajan.ahuja@gmail.com
info@realtyverticals.com |
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Indian Economy: Watch Out!
Pitfalls or Potholes Ahead
On a drive up the Himalayas
I just got my car fueled up and was about zip past all cylinders blazing
when I heard the Gas Station shout out, and say "Drive Slow the road ahead
is groggy. Pitfalls have turned into potholes.Watch your step."
Ever since the Indian economy
was liberalized, in early 1990’s, India has emerged as the world leader
in information technology and business process outsourcing, with an average
growth of about 6 percent a year. Growing foreign investment and easy credit
have fueled a consumer revolution in urban areas. With their high disposable
incomes, jet set young professionals, and shopping malls, large parts of
Indian cities are bracing to match any of the giant cities-commercial marvels
of the modern world.
INDIA is a thriving capitalist
phenomenon Lakshmi Mittal, the fifth richest man in the world, Ambanis
& TATA’s are vying for takeovers and mergers with voracious appetite
across the world.
Indian economy exudes with
the belief that the 21st century will be theirs, the Indian Century just
as the 20th was American. Simple demographics make India impossible to
ignore, and the slowdown in the United States economy adds to its appeal.
About half of the country’s 1.1 billion people are under 25, and its rapidly
expanding middle class is already estimated to be as large as the entire
population of the United States. It’s what many call ‘India phenomena.’”
Many companies, universities and research centers are looking toward India
because it had the “biggest pool of human resources in the world.”
But the pitfalls in India
often surprise even first-time visitors to the country. But having just
the ‘profit-motive’ view of India veils more facts than it reveals. Many
grim situations stall India’s vision. They are unlikely get solved as long
as the wealthy and resourceful, choose to be complacent. Reports of the
alleged rise of India hardly mention the fact that the country's $728 per
capita gross domestic product is just slightly higher than that of Africa
and that, as the 2005 United Nations Human Development Report puts it,
even after sustaining its current levels of growth rates, India will not
catch up with high-income countries until 2106.
On the other hand India is
hardly making any rise on Human Development index, where it ranks 127,
just two rungs above Myanmar and more than 70 below Cuba and Mexico. Even
though there has been a recent reduction in poverty levels, nearly 380
million Indians still live on less than a dollar a day. The country's growing
economy, 2.5 million Indian children die annually, accounting for one out
of every five child deaths worldwide; and facilities for primary education
have buckled down in large parts of the country.
In the countryside, where
70 percent of India's population lives, the government has reported that
about 100,000 farmers committed suicide between 1993 and 2003. Large part
of the country including so many districts where communists battle landlords
and police, imposing a harsh form of justice on a largely hapless rural
population. Just 1.3 million out of a working population of 400 million
are employed in the information technology and business processing industries
that make up the so-called new economy.
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India has recently gained
on fronts like trade and cooperation between India and China is growing;
and, is hoping for American generosity on the nuclear issue, India is too
dependent on Iran for oil (it is also exploring developing a gas pipeline
to Iran) to wholeheartedly support the United States in its efforts to
prevent the rise of Nuclear Islamic Republics. But the world is more of
a “organic synergy” where nations depend upon each other now than during
the cold war, and the world can no longer be divided up into strategic
blocs and alliances. And India certainly takes a lead with China on one
front. Because of increasing business travel demand, American Express predicts,
hotel room rates here will increase more than anywhere else in the world
in 2008: 34 to 38 percent for midrange hotels and 38 to 41 percent for
the best hotels. |
Galvanized by fast economic
development, energy demand from Asia has been one of the main contributors
to higher oil prices. In the last two years, China and India accounted
for about 70 percent of the increase in energy demand. The swelling fuel
consumption presents an impending challenge to the world’s energy systems
which can strain global oil trade, push up prices and lead to significantly
higher carbon dioxide emissions in coming years. Although India’s consumption
is third as much as China, it imports 70 percent of its oil. It also has
no strategic reserves, and demand is growing faster than in any other economy.
Like China, India subsidizes fuel, particularly the kerosene used by lower-
and middle-class families for cooking — a policy that costs it some $12
billion a year.
India will have to keep investing
even more aggressively in alternative fuel technologies before it becomes
too late to catch up. It has to start fueling down to keep the economy
fueling for years to come. The other impending problems also require an
action in equal measure and socio-political will. Problems too long ignored
become too big and overshadow even the biggest of miracles waiting to happen.
The future lies ahead waiting to unplugged. Caution: Don’t Burn Your Hands!
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