The growth gamble

The sharp fall in economic growth in the third quarter of the current fiscal, is the sixth time in the last seven quarters that growth has declined and is proof, if any were needed, of the seriousness of the slowdown.

The Hindu : Opinion / Editorial : The growth gamble: "A reduction in rates will boost sentiment, which is desperately needed now, and encourage companies to resume investment activity. As for the government, the fiscal deficit is spinning out of control and it has to either cut spending or raise additional resources, both of which are tough."

Time to be realistic

According to the advance estimates of GDP growth, the economy will grow by 6.9 per cent during the current year (2011-12), sharply lower than the 8.4 per cent clocked last year. This may not be surprising but a detailed analysis of the numbers does indeed provide grounds for concern.

It may even be argued that a growth rate of almost 7 per cent is commendable given the adverse global and domestic environment. However, the signs of the slowdown continuing are discernable everywhere. The Hindu : Opinion / Editorial : Time to be realistic

"With the right policy reorientation — and a reform process that ensures transparency and regulation — it should be possible to revive these key sectors and post more impressive growth figures next year."

Good news at last

The Index of Industrial Production (IIP) for November released recently showed the output rebounding sharply. The rupee, which fell drastically, appears to have stabilised. The domestic stock markets have not declined as much as many expected they would.

The Hindu : Opinion / Editorial : Good news at last: "These are certainly welcome news, but it would be premature to conclude that the worst is over and economic recovery is round the corner. "

An imbalance to address

"The government has attributed the weakening of the rupee against the dollar in recent weeks to the reduced inflow into and occasional outflow of foreign portfolio investment from India’s equity markets. "

This article discusses as to why this argument is not convincing. The Hindu : Columns / Chandrasekhar : An imbalance to address: "India cannot continue to rest purely on the benefits it has hitherto derived from the exports of software and IT-enabled services. An effort to realize at least a part of the manufactured export competitiveness that liberalization was supposed to deliver, but did not, is crucial."

Revenues from remittances or the export of labour services cannot be the mainstay of the balance of payments of a modern nation.