News / Economy

India Hopes for Financial Revival

An Indian vegetable vendor counts rupees at a vegetable wholesale market in Allahabad, India, Nov. 21, 2013.
An Indian vegetable vendor counts rupees at a vegetable wholesale market in Allahabad, India, Nov. 21, 2013.
Anjana Pasricha
India is hoping for a financial revival after economic growth slipped to decade-low levels in the last two years.  But there are few signs of a return of the robust growth that catapulted India into the ranks of the world's fastest growing economies.

Gurdet Singh, who farms about 100 acres of fertile land in Wazidpur village in northern Punjab state, a prosperous agricultural region, plans to buy a bigger, new tractor to ease his work on the farm.

He says his two tractors have become old and require a lot of repair.  Singh even hopes to buy a car after he pays off the loans for the tractor.

The automobile sector, which witnessed a huge slowdown in the last two years as the economy slumped to a decade low, is pinning its hopes on consumers like Singh in the country’s vast rural areas.

Vishnu Mathur, who heads the Society of Automobile Manufactures of India, says that while demand in urban areas for passenger cars continues to be sluggish, the upbeat rural economy provides a silver lining.

“The recession we have been seeing is largely an urban phenomenon," Mathur noted. "The monsoons have been good and the harvest season is now round the corner, so if we have a good harvest, then I am sure there will be a further buoyancy coming out of the rural market.”
       
The optimism in the automobile industry signals that the worst could be over for the Indian economy, which is expected to clock growth of less than five per cent  when the 2013 fiscal year ends in March.  
 
Experts are pointing to the so-called “green shoots.” The farm sector, which sustains two thirds of the country, has posted healthy growth. The rupee, which lost more than 20 per cent of its value versus the dollar last year, has recovered some ground and stabilized.  Exports have revived.

Rafique Ahmed, head of the Federation of Indian Export Organizations, says exports are being boosted by a cheaper rupee and better global economic conditions.

“The prospects are good. Our rupee has helped us," Ahmed said. "Secondly the market also has stabilized in Europe and America and even in ASEAN (Association of South East Asian Nations) countries it is better. So, exports should grow in a positive tone…slowly it will come to double digit.”

But even as growth is widely expected to pick up from the low point it hit last year, economists say it is unlikely to climb back to the heady numbers which had put India among the world’s fastest growing economies. Just three years ago (2011), India’s economy expanded by more than nine per cent.
 
Now the expectations are much more modest. Finance Minister P. Chidambaram has said growth will accelerate to more than six per cent in 2014, and return “step-by-step” to its potential of eight percent.

Economists say the key to boosting India’s economy is to revive confidence among investors, both domestic and foreign. Worried by lack of reforms and bureaucratic roadblocks, private investment has reduced to a trickle. Most businesses are now waiting on the sidelines for the outcome of national elections to be held by May.
 
Chief economist at credit ratings company, CRISIL, in Mumbai, D.K. Joshi, says the pace of economic recovery critically hinges on the outcome of those polls.

“If you get a fragile mandate and a coalition of not so like minded people, under these conditions sustaining high growth is very difficult," Joshi explained, "and if you get a decisive mandate and you get one single political party who is able to push the projects much faster, it will lift the sentiment of the private sector.  If those things happen, we do believe growth can lift to a little over six and a half percent.”

The decade-long spell of high growth which India experienced until 2011 had catapulted millions of people into the middle class and created new jobs which the country needs for its huge, young population. But economists are not so sure that India can achieve that again.

You May Like

Turkey: No Ransom Paid for Release of Hostages Held by IS Militants

President Erdogan hails release of hostages as diplomatic success but declines to be drawn on whether their release freed Ankara's hand to take more active stance against insurgents More

Audio Sierra Leone Ebola Lockdown May Be Extended

Lockdown, which started Friday, aims to allow health workers to locate hidden Ebola patients, educate others on how to avoid the deadly disease More

US Pivot to Asia Demands Delicate Balancing Act

As the tumult in the Middle East distracts Obama, shifting American focus eastward appears threatened More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Natural Gas Export Plan Divides Maryland Towni
X
Deborah Block
September 21, 2014 2:12 PM
A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Natural Gas Export Plan Divides Maryland Town

A U.S. power company that has been importing natural gas now wants to export it. If approved, its plant in Lusby, Maryland, would likely be the first terminal on the United States East Coast to export liquefied natural gas from American pipelines. While some residents welcome the move because it will create jobs, others oppose it, saying the expansion could be a safety and environmental hazard. VOA’s Deborah Block examines the controversy.
Video

Video Fears Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Difficult Tactical Battle Ahead Against IS Militants in Syria

The U.S. president has ordered the military to intensify its fight against the Islamic State, including in Syria. But how does the military conduct air strikes in a country that is not a U.S. ally? VOA correspondent Carla Babb reports from the Pentagon.
Video

Video Iran, World Powers Seek Progress in Nuclear Talks

Iran and the five permanent members of the U.N. Security Council plus Germany, known as the P5 + 1, have started a new round of talks on Iran's nuclear program. VOA State Department correspondent Pam Dockins reports that as the negotiations take place in New York, a U.S. envoy is questioning Iran's commitment to peaceful nuclear activity.
Video

Video Alibaba Shares Soar in First Day of Trading

China's biggest online retailer hit the market Friday -- with its share price soaring on the New York Stock Exchange. The shares were priced at $68, but trading stalled at the opening, as sellers held onto their shares, waiting for buyers to bid up the price. More on the world's biggest initial public offering from VOA’s Bernard Shusman in New York.
Video

Video Obama Goes to UN With Islamic State, Ebola on Agenda

President Obama goes to the United Nations General Assembly to rally nations to support a coalition against Islamic State militants in Iraq and Syria. He also will look for nations to back his plan to fight the Ebola virus in West Africa. As VOA White House correspondent Luis Ramirez reports, Obama’s efforts reflect new moves by the U.S. administration to take a leading role in addressing world crises.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7768
JPY
USD
108.84
GBP
USD
0.6124
CAD
USD
1.0999
INR
USD
61.042

Rates may not be current.