The world economic scenario was in a turmoil for the last two years. U.S., U.K. and other developed countries like Japan were struggling to find the root cause. There is a wise saying, whenever something goes wrong look at the basics. What are the basics of economic prosperity? It is not a rocket science to divide the economic engines into Agriculture, Industrial and Services sector. Everything else come under these three pillars of economy. Finding the right balance is long term and playing with anyone is short term. It is evident that finding the right balance always takes more time than disturbing the right balance. A little push or pull in any one of the pillars would affect the entire set pillars. This is what happened everytime the world economy plunged.
However, there were few emerging nations which believed in basics of economics and regardless of the school of thought, sailed through the turmoil without toppling. India and China are among these few nations. India’s Q2 GDP growth at factor cost increased to 7.9 against the world trend. It is not surprising to see that this growth has been fueled by growth in agriculture by 1.9, Industry by 8.2 and services by 9.3. It is not that India has attained the perfect balance but it is going in the right direction. Pre slowdown India was promoted as a developing nation with the statement ‘India Shining’ and it was seen apprehensively by many. Post Slowdown again the numbers show that the shine factor has not diminished. If we try to do the SWOT analysis of India we see that their biggest strength is their population and the opportunity in services that they are exploiting goes well with their strength. Another reason for the shine factor is that the latent strengths make it sustainable. India’s large mineral deposit is still to be exploited at developed rates which would further increase the shine factor in future. Now, the threat which is bothering India is the shadow of towering debts around the world. The recent Dubai crisis and other such incidents might reduce the inflow of goodies which in turn may dampen the shine. One weakness which is acting as the biggest resistance to growth is the conflicts with its neighbors. Few years ago it had Pakistan, now it has China and Srilanka. These week links in the chain can be the biggest enemy of the shine factor.
Let us hope that the growth drivers of the world reach the balance soon.
Rogues
