indian economy threaten by collapse - Looking very bad for India

[mr.pti]

(Hegnar.no): If the landing is not hard for China, it looks ugly for another one of Asia's largest economies - India.

Economics editor Larry Elliott, the British newspaper The Guardian, writes that India is at a critical phase, and characterizes the development as the return of the Asian crisis in 1997/98.

"Hot money" runs away
The past two years, the Indian rupee has depreciated 44 percent, and on Monday hit the all time low against the dollar. It is an expression of great mistrust.

While plunging stock market, bond yields are just under 10 percent and capital flows out of the country.

Elliot points out that an emerging economy developing rapidly attracting attention from foreign investors. Investments within the coming together of "hot money" which bypasses capital control.

- The inflow of capital exchange vows, making imports cheaper and exports more expensive. The trade deficit is inflated, the growth slows, deep-seated structural flaws are more visible and "hot money" runs away, he writes in his blog.

And he points to India as an example of such a development.

What does Bernanke?
Rupee sharp fall is now also triggered by speculation that the Federal Reserve is considering slowing the pace of the printing press in the next month.

Elliot also believe that this has implications for all emerging economies and the fear of lower stimulus means slower growth in the United States, with a knock-on effect on exports from developing countries.

- Secondly, the high-yield currencies such as the rupee earned global investors looking for returns. Tightens the U.S. monetary policy, the dollar more attractive and less attractive rupee continues Elliott.

India's first down in the ditch?
He points out that while the Indonesian rupiah and the South African rand also get to taste the roast, it is India, with its large trade and budget deficits, which end up in an accident.

Crises in Emerging Economies go through three phases: In phase 1 does not make any politicians in the hope that the problems will disappear by itself. In phase 2 quick together some halvveise crisis measures in panic. In Phase 3, they cry either the IMF or fail to come up with its own plan.

India is moving into Phase 3, according to Elliot.

http://www.dagbladet.no/2013/08/20/nyheter/okonomi/hegnarno/asia/india/28807600/

 

[TONIC]

Yaar maza aa jayee collapse ho he jayee Indian Economy...do char cases Satyam jaisay aa jayen to aur maza ayee ga....Sab bhaiyon say request hai mil kar India kee barbadi ke dua mangain.

 

[BHAAI]

انڈیا کی کرنسی دن با دن جس ترھا گرتی جا رہی ہے اس سے لگتا تو یہی ہے کہ انکا ٹائم ہوگیلا ہے .کسی انڈین کو بولو کے تہمارا ریٹ تو گرتا جا رہا ہے تو وہ شرم کے مارے بھاگ نکلتا ہے ​

 

[rmunir]

شاید اسی لیے بھارت سرکار پاکستان سے جنگ کے لیے پر تول رہی ہے کے اپنی تباہی کا سارا ملبہ پاک بھارت جنگ پر ڈالا جاسکے
​

انڈیا کی کرنسی دن با دن جس ترھا گرتی جا رہی ہے اس سے لگتا تو یہی ہے کہ انکا ٹائم ہوگیلا ہے .کسی انڈین کو بولو کے تہمارا ریٹ تو گرتا جا رہا ہے تو وہ شرم کے مارے بھاگ نکلتا ہے ​

 

[kashoo]

UAE ma to indian baray khush lag ray hain... bank loans on the rise....

 

[Pakistan1992]

maza aa gaya(clap)

 

[The Pakistani]

Crisis ka word to sirf pakistan kelie bna he par lgta he Zardari k india visit ne wahan bhi manhosit phela di..:P

 

[Khallas]

Rundia ka is per bhi jaldi kuuuti cheeka shoro ho jaye ga....Is saab k pechay Pakistan ka haath hay ... (bigsmile)

 

[Imranpak]

Only some years back they were so arrogant of being the next this and that! Allah is the best of planners where he punishes beggars trying to be kings:lol::lol:

 

[the real deal]

انڈیا کی کرنسی دن با دن جس ترھا گرتی جا رہی ہے اس سے لگتا تو یہی ہے کہ انکا ٹائم ہوگیلا ہے .کسی انڈین کو بولو کے تہمارا ریٹ تو گرتا جا رہا ہے تو وہ شرم کے مارے بھاگ نکلتا ہے ​

allah karey pak currency india se agay nikal jaye
allah humarey pakistan ko taraqi aur india ko nist o naboot karde ameeeen

 

[Bani Adam]

Indian economy tanked, facing a financial crisis -- The Economist

Excerpts....
Indian Economy Tanked, Facing a Financial Crisis

Aug 24th 2013 | The Economist From the print edition

Indias economy is in its tightest spot since 1991 ....
...........

Not so long ago India was celebrated as an economic miracle. In 2008 Manmohan Singh, the prime minister, said growth of 8-9% was Indias new cruising speed. He even predicted the end of the chronic poverty, ignorance and disease, which has been the fate of millions of our countrymen for centuries. Today he admits the outlook is difficult. The rupee has tumbled by 13% in three months. The stockmarket is down by a quarter in dollar terms. Borrowing rates are at levels last seen after Lehman Brothers demise. Bank shares have sunk.

On August 14th jumpy officials tightened capital controls in an attempt to stop locals taking money out of the country. That scared foreign investors, who worry that India may freeze their funds too. The risk now is of a credit crunch and a self-fulfilling panic that pushes the rupee down much further, fuelling inflation. Policymakers recognise that the country is in its tightest spot since the balance-of-payments crisis of 1991.

How to lose friends and alienate people
....... During the 2003-08 boom, when reforms would have been relatively easy to introduce, the Indian government failed to liberalise markets for labour, energy and land. Infrastructure was not improved enough. Graft and red tape got worse.

Private companies have slashed investment. Growth has slowed to 4-5%, half the rate during the boom. Inflation, at 10%, is worse than in any other big economy. Tycoons who used to cheer Indias rise as a superpower now warn of civil unrest.

As well as undermining 1.2 billion peoples hopes of prosperity, failure to reform dragged down the rupee. Restrictive labour laws and weak infrastructure make it hard for Indian firms to export. Inflation has led people to import gold to protect their savings. Both factors have swollen the current-account deficit, which must be financed by foreign capital. Add in the foreign debt that must be rolled over, and India needs to attract $250 billion in the next year, more than any other vulnerable emerging economy.

A year ago the new finance minister, Palaniappan Chidambaram, tried to kick-start the economy. He has attempted to push key reforms, clear bottlenecks and help foreign investors. But he has lukewarm support within his own party and faces obstructionist opposition. Obstacles to growth, such as fuel shortages for power plants, remain. Foreign firms find nothing has changed. Meanwhile, bad debts have risen at state-run banks: 10-12% of their loans are dud. With an election due by May 2014, some fear that the Congress-led government will now take a more populist tack. A costly plan to subsidise food hints at this.

Stopping the rot
To prevent a slide into crisis, the government needs first to stop making things worse. Those capital controls backfired, yet the urge to tinker runs deep: on August 19th officials slapped duties on televisions lugged in through airports. The authorities must accept that 2013 is not 1991......

And so the Reserve Bank of India must let the rupee find its own level. The currency has not yet wildly overshot estimates of fundamental value. Raghuram Rajan, the central banks incoming head, should aim to control inflation, not micromanage one of the worlds most traded currencies.
Second, the government must get its finances in order. The budget deficit has been as high as 10% of GDP in recent years. This year the government must hold down its deficit (including those of individual states) to 7% of GDP. It is already cutting fuel subsidies, andnotwithstanding the pressures in the run-up to an electionshould do so faster.

This is not enough to fix the governments finances, though. Only 3% of Indians pay income tax, so the governments tax take is puny. A proposed tax on goods and services, known as GST, would drag more of the economy into the net. It is stuck in endless cross-party talks. If the government can rally itself before the election to push for one long-term reform, this is the one it should go for.......

There are glimmers of hope: exports picked up in July, narrowing the trade gap. But India faces a difficult year, with jittery global markets and an election to boot. Even if it scrapes past the election without a full-blown financial crisis, the next government must do much, much more to change India. Over the coming decade tens of millions of young people will have to find jobs where none currently exists. Generating the growth to create them will mean radical deregulation of protected sectors (of which retail is only the most obvious); breaking up state monopolies, from coal to railways; reforming restrictive labour laws; and overhauling Indias infrastructure of roads, ports and power........

http://www.economist.com/news/leade...bold-how?fsrc=scn/fb/wl/pr/howindiagotitsfunk

 

[alimohsan52]

Re: Indian economy tanked, facing a financial crisis -- The Economist

When the Indian Economy is down, it is best to create hatred with Pakistan and get support from the Public. This will be the Indian strategy.

 

[modern.fakir]

Re: Indian economy tanked, facing a financial crisis -- The Economist

They have only their own myopic behaviour to blame for this. Not building alliances with neighbours like Pakistan and China by invading their lands , Cheating western countries in the name of visas. stopping walmart from opening branches...not buying european cars etc....You cant have everything your way !!...Give and Take is how the world works ...(bigsmile)

Now they can pay the price !(bigsmile)...Ladakh, kashmir and economy and pathans from afghanistan ...the situation is starting to look really bad !!:lol::lol:

 

[The Pakistani]

Re: Indian economy tanked, facing a financial crisis -- The Economist

Thanks God we got rid of India and Bangalis..Otherwise hmara hal bhi wahi hota jo aj Rohinga muslims ka he..

 

[hans]

Re: Indian economy tanked, facing a financial crisis -- The Economist

Bangalis?????
whats Bangladesh has to do with this?????

Thanks God we got rid of India and Bangalis..Otherwise hmara hal bhi wahi hota jo aj Rohinga muslims ka he..