We all know that India is surging ahead in the global economy. In the following article, the author highlights some of India's latest purchasing trends and India-based MNC expansions.
http://news.bbc.co.uk/2/hi/south_asia/3357957.stm
He continues to mention what India's politicians should consider to maintain and thrive from their 8% economic growth rate.
"Raise the level of investment (and that includes investment in people)
Make a fetish of efficiency
Make it easier for new private firms to start up business."
So what else might contribute to sustaining India's momentum?
Recent news shows India has been weighing the rapid rise of its population and what it will mean for the economy. At the moment, India is on par with China, however India has many more young people (~1/2 billion are under 25 years old). This grants India a potential labor force comparative advantage over China--who will soon be caring for a much older population. Yet India's government has begun one child policies to balance the rising population with limited natural resources and government social service costs. The Indian government is encouraging delaying the first child through incentives such as a "honeymoon package" and other family planning education programs.
http://www.economywatch.com/economy-business-and-finance-news/india-one-child-policy-21-09.html
The following articles get more into the economic nuts and bolts of nation and business building. The Prime Minister Singh has lifted some of the foreign direct investment caps via bond purchasing. This is going to allow external investors the opportunity to send India a large inflow of cash assets, which can then be used for infrastructure building. Infrastructure built now can then be used to provide services for the Indian population. So why might other nations be interested in buying Indian bonds at the moment--especially while there is still a global credit crunch?
The second link contains some financial figures indicating rather high interest rates, one of the highest in Asia and rather high on global market. Much of this in short-term debt, bringing even more skeptical investors concerned about long-term risks. That financial capital (approximately 11.8 billion and rising) will go a long way to continue development in India's public and private sectors. If India can work to close the gaps between infrastructure linkage, providing social services to its citizens, and capitalize upon its massive labor force potential (hopefully building entrepreneurial activity from within), then it may working towards the right solutions to maintain its current rate of growth.
http://www.businessweek.com/news/2010-09-24/singh-debt-cap-doubles-for-international-buyers-india-credit.html
http://www.businessweek.com/news/2010-09-27/bills-yielding-26-times-treasuries-beat-stocks-india-credit.html
No comments:
Post a Comment