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India Whining! The new slogan?!
It’s hard ‘economic’ times for India and Indians... When will it end?

‘Immunity’ is not the word to swear by for any economy in this globalised world, not even for India! Yes, as the world slips into recession, India is also facing the heat of lowered sentiments, with its GDP slated to fall by at least 2% by the year 2009. Really, this time round the consequences for the Indian economy can be harsher than what was witnessed in 1982 when the GDP growth fell by 1%!

The best-case projection, by New Delhi-based Centre for Monitoring Indian Economy (CMIE) forecasts India’s GDP to grow by 8.7% during 2008-09. For the following year though, the best-case scenario gets modest at just about 8%. And the worst case? Well, Goldman Sachs is already out with it, with predictions of a slower 6.7% GDP growth this fiscal and a snail speed 5.8% for 2009-10. The real point to worry about at the moment is how the 2% drop in GDP growth would transform at the household and per-capita levels. New Delhi- based analytics firm Indicus Analytics assumes the average inflation to remain at 9% for 2008-09 and 6% for 2009-10. Reports estimates that at the macro level, for the fiscal ending March 2009, the total difference in GDP (considering the current prices) between best and worst growth projections will be Rs.20.37 billion. Horrifyingly, the gap is projected to increase to a gargantuan Rs.2.08 trillion during 2009-10! This Rs.2 trillion-odd figure is about 8% of private financial consumption expenditure (PFCE) for 2007-08. In addition to this, investment-led growth (which accounted for over 55% of GDP in 2007-08) is noticeably slowing down on the back of expensive and hard-to-get credit.

This downturn has caught India by the collar, and going forward, it may even turn into a hanging noose for many! How does the government react to this change of pace of the global economy? (And which government are we talking about?) And the common Indian, well, he looks so ‘confused’... Are you too?!

By:- B&E

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