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

African States Push to Keep Boko Haram Offline

Central African telecoms ministers working with Nigeria to block all videos posted by Boko Haram in effort to blunt Nigerian militant group's propaganda More

Falling Oil Prices, Internet-Savvy Youth Pose Challenge for Gulf Monarchies

Across the Gulf, younger generations are putting a strain on traditional politics More

Philippines Call Center Workers Face Challenges

Country has world’s largest business process outsourcing, or BPO, industry, employing some one-million workers More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8896
JPY
USD
119.26
GBP
USD
0.6475
CAD
USD
1.2451
INR
USD
61.816

Rates may not be current.