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Last updated: 27 Jan, 2016  

India.9.Thmb.jpg UN world economic outlook: India stands out

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Bikky Khosla
A UN report, "World Economic Situation and Prospects 2016", points to the fact again that India is the brightest spark in today's gloomy global economic environment. The report projects that we will be the fastest growing large economy in 2016, registering a growth of 7.3 percent. Macroeconomic environment in the country, the report says, has improved notably over the past two years, buoyed by decline in prices of oil, metals and food. It also draws attention to a rise in consumer and investor confidence, despite difficulties faced by the Centre in pushing its wide-ranging reform agenda. This outlook is encouraging, particularly at a time when the global economy is not in the best of health.

The report predicts a modest global growth of around 2.9 percent for 2016, ticking up to around 3.2 percent next year, adding that the developed economies, particularly the US -- and not the developing and transition economies --  are expected to contribute more to global growth this year. The report also draws attention to improved economic health of the US and the EU, adding that region-wise, however, East and South Asia will remain the world's fastest-growing regions, despite the China slowdown. Some major 'headwinds' --  including persistent macroeconomic uncertainties and volatility, low commodity prices and declining trade flows, and rising volatility in exchange rates and capital flows -- which will continue to shape the near-term outlook and long-term prospects of the global economy, are also pointed out.

As far as prospects of the Indian economy are concerned, I think a few points of the report deserve special mention. First, in most South Asian economies, including India strong private consumption will continue to be the main driver of growth. Second, the RBI's monetary easing last year has not translated into much decrease in bank lending rates and rise in commercial loan growth. Third, there is a significant risk of deterioration in market confidence if reforms do not continue. Fourth, any adverse shock, such as lower-than-average monsoon rainfall, could have a sizable negative impact on output growth. And, with little scope left for monetary policies further, time has come for fiscal policies to do the heavy-lifting to support growth.

In the background of the above, I think reviving domestic demand, particularly rural demand, should be a high priority for our policy makers. Also, we need to find a way out of high interest rates so that the Indian industry gets access to affordable loans. In addition, reforms must continue, for which the Centre must do its best and the opposition, on its part, must move beyond obstructionist politics. As far as food prices are concerned, efficient supply-side management can make a big difference. With regards to fiscal policies, I think it is the right time to give a thought how to increase revenues. The decline in oil prices has created some room for fiscal expansion, and we need to make the best of it so that spending on infrastructure, health and education can be increased to boost the growth rate this year and also to pave the way for future growth.

I invite your opinions.
 
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Affordable interest rates and easy access to them
Bhagawath prasad | Mon Feb 22 06:54:22 2016
Sir, in order to improve SME outlook in our country, government must act to make easy availability of funding and reduce high interest rates,currently procurement cost is pretty high due to down sliding rupee value , the only way to compensate the procurement lossess is to reduce interest rates.


UN World economic outlook : India stands out
kushal kumar | Thu Feb 11 05:53:32 2016
India’s economic growth in Q3 – 2015 and after having growth but with slow trend. This trend is in line with this Vedic astrology writer’s predictions in monumental article – Stressful times ahead for world economy in 2015 and 2016 – published on 2 June 2014 , over 19 months past from now , in online magazine . Related to the period we have reached , it was predicted : "A major cause of concern may arise from November 2015 to July 2016". Further said : "Thus , a major concern could surface in first half of 2016". This opinion was reflected particularly in article “ 2016 – a woeful year for India with slight cheer at the end" published on 18 January 2016 in an online magazine. Just reproducing the related text from the article : " February and March 2016 seem to be grim for a variety of concerns. Economic issues may evade solution causing economy to slide down".


Hurdles in development
Devendra Varma | Fri Jan 29 05:12:22 2016
It takes such a long time to start business in India. In Singapore and in Mauritius for example, it takes less than two weeks from date of application for permits and licenses to starting business. In India, even an Indian company will take two years to start operation. Your bank charges and availability of finance are other hurdles. If they can be removed and your economy is really democratized so that the lowest down the ladder can afford to move up to become efficient producers and cautious consumers, India will become within 10 years the first economy and the first military power in 30 years. I have posted these comments for the laymen. contact devendravarma238@gmail.com


UN world economic outlook: India stands out
A V Chandran | Thu Jan 28 06:47:45 2016
Contribution of India in the world with reference to both micro and macro economy performed mixed results of encouragement as well as discouragement in view of abnormal non-budget expenditure and less non-budget revenue. Non-Budget Expenditure and Non-Budget Revenue could be in place in order to maintain continuous improvement in economic culture of a Nation whereas Indian economy stands disturbed by all means. India must be very cautious about macroeconomic field like Agriculture, mining, Petroleum products and banking subject to proper regulatory measures and reforms. Further Share investments in both private and public Sector companies must be secured in all respects whereas secured shares and secured deposits must be in place with reference to banking sector and head depreciation must be abolished once for all in all accounting formalities as it seems to be a double costing factor. In view of exclusive responsibility of secured deposits to banking sector secured working capital requirement of industries could be reviewed based on average of previous three years increasing or decreasing turnover subject to a maximum of 110% of average turnover for continuous increasing return and 60% of average turnover for continuous decreasing turnover. If this concept is applied India could establish a reasonably good economic growth with number one in the world.


UN world economic outlook
Lala Hari | Thu Jan 28 06:09:17 2016
Every growing entity needs investment, and the investment must not come only from Govt., but from all resources, like Pvt. NGO,s religious inst. etc.


 
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