India - Touching New Heights

Way Above the Rest

India is doing far better than its peers

Business Today's article on India by Shankar Sharma has some eye catching facts highlighted by the author who is the Vice Chairman and Joint Managing Director, First Global. Shankar raises concern stems from disquieting reports in the media about how foreign brokers are turning bullish on India, turning bullish on India's prospects, on India's rupee, on India's current account deficit, on India's reforms, on India's rule of law, on India's movies. However he mentions that the Wall Street biggies have never got it right on their predictions about the market.

 

The Supremo’s, the analyst and economists placed in Hong Kong and Singapore have been bullish on China and bearish on India and many Global Rating agencies like Morgan Stanley, S&P 500 had also started pushing down the progress of India and we could witness the Indian Finance Ministry and Central Bank opposing the facts and predictions laid down by these rating agencies. The downgrade had crossed all limits as the article states that few Western analysts had even stated that the "I" in BRIC should be Indonesia and not India. This could be a profound thought or research as the world economy saw a slowdown and India was also impacted by the wave.

SOME FACTS ABOUT INDIA

1) India is the fourth best performing market in the world this year, up 22 per cent.

2) The rupee has been flat through the year. China is down 4.5 per cent this year. Russia is up just three per 

cent. Brazil is up one per cent (and its currency is down eight per cent this year!).

3) Growth of Indonesia is up 13 per cent however its currency is down six per cent this year.

4)  India is 14th in terms of volume of factory output

5) India is regarded as the 15th best economy in terms of production in the services sector

India has seen some changes in its policy in the near past with the government making road for FDI (Foreign Direct Investment) in single and multi-brand retail (a long pending action that could help overpower other emerging economies). India's economy ranked 3rd largest in the world in 2011 GDP PPP (Purchasing Power Parity) with above USD 4000 bn only behind the Unites States (USD 15094 bn) and China (USD 11316 bn) as per IMF World Economic Outlook April 2012 report and PriceWaterhouseCoopers 2050 Report predicts India to beat United States and run ahead in the ranks to position itself at no. 2. India's Consumer Confidence Index (CCI) has been consistently above the world average as per Nielsen Global CCI where India stand at 119 points in Q2, 2012 and in Financial Market Development India has been ranked 21st, much better than other Emerging Market Economies (EME).

After considering the fact that India is an emerging economy and has a lot of potential we also need to keep in mind that Indian Business houses has to face a lot of challenges and has many restrictions because of the deep-rooted Indian laws, unstable political environment, significant number of people still below the poverty line and certain other such facts. India has slipped four places to 40th place in a ranking of 62 leading financial systems and capital markets, because weak institutional framework, business environment and relative instability failed to support growth as stated by the World Economic Forum said in a report released on 31 October.

Before giving a pat on its back, India has to overcome various such hurdles and also uproot the core issues of poverty and income instability. I still say and agree that India projects all qualities of being a 'Developed Economy' in the coming years.