News / Asia

India’s Economy Looks to Rebound in 2013

An Indian laborer carries a bag full of potatoes at a warehouse in Jammu, India, July 31,2012.
An Indian laborer carries a bag full of potatoes at a warehouse in Jammu, India, July 31,2012.
Anjana Pasricha
India’s economy has experienced its worst slowdown in nearly a decade this year. But there are signs that the country, which is still among the world’s fastest growing economies, may soon begin to recover from the slump.

Month after month in 2012, virtually every sector of the Indian economy - agriculture, mining, manufacturing and services - slowed. At the end of the year, economic growth stood at 5.3 percent.  

It was a huge disappointment for a country whose economy had been racing ahead at eight percent plus for the last eight years.
        
Like many other countries, India was affected by the global slowdown as exports were hit. But several domestic factors also pulled down the economy.
 
Many economists blamed the government, which faces allegations of graft in many spheres, for policy inaction.

Chief economist at ratings agency, CRISIL in Mumbai, D.K. Joshi, says the downturn was sharper than warranted by global factors.  
   
“It is widely recognized now, to clear projects it is taking time because of governance issues. And when it takes time to clear projects, the investment pipeline gets choked," says Joshi. "As a result of that investment slowed down quite significantly. Then we also had high inflation regime, and high inflation means the Central bank cannot cut interest rates to perk up the economy.”
 
The government admits that investment is critical to revive the economy. Faced with plummeting growth, it has taken some steps to liberalize the economy and make it easier for foreign businesses to pump money into sectors such as retail, aviation and insurance. The long-awaited reforms were the biggest initiated in nearly ten years. Authorities also promised to speed up clearances for large infrastructure projects.

The government also announced spending cuts as it grappled with high deficits. It slashed subsidies on fuel despite political opposition. This is expected to ward off the threat of a credit rating downgrade.

Economist N. Bhanumurthy with the National Institute of Public Finance and Policy in New Delhi, says these steps are meant to reassure investors and could help the economy stage a gradual recovery.    

“Frankly right now the most important issue is confidence among investors, both domestic and foreign. All these measures are expected to provide some kind of confidence-booting measures for revival in the economy." he said. "Our own projections for the next year, 2013-14, is 7.1 percent.”

 
Prime Minister Manmohan Singh has said the government’s first priority is to reverse the slowdown. But he says that a return to eight percent growth is an ambitious goal.
 
Despite the slowdown, India remains high on the radar of foreign investors.

You May Like

Photogallery US Nurse ‘Cured of Ebola,’ NIH Says

Nina Pham, Texas nurse who treated first Ebola patient in US, received no experimental drugs; WHO expects vaccine surge in 2015 More

Video Islamic State Militants Encroach on Baghdad

update Iraqi capital not under ‘imminent threat,’ US military says, amid worries about foothold More

Video Hong Kong Protesters Focus on Holding Volatile Mong Kok

Activists say holding Mong Kok is key to their movement's success, despite confrontations with angry residents and police More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid