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

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.