This week I found an article comparing India's economy to China's. The article specifically addresses the two economies' response to the economic crisis. Although India's economy always comes in second place when compared to the Chinese economy, India seems to have weathered the economic crisis better than China. The two countries implemented different stimulus programs in order to continue growth during a time of recession. While China hoped for credit growth to stimulate the economy, India used tools similar to other countries around the globe, cutting interest rates, increasing fiscal spending and providing tax breaks. Throughout the crisis, the banking sector in India has remained conservative. A strong domestic economy also supported the country causing it to be less affected by the external economic climate. The stimulus measures, taken on a much smaller scale than that of China, have allowed the Indian economy to continue to grow during a difficult period for the global economy.
This article provides interesting information on two countries that are often compared as large emerging economies. It is important to note that being less exposed to the international scene has allowed India's economy to remain stable. The article illustrates that India is not immune to all problems most countries are facing the current economic situation, a budget deficit still lags and the agricultural sector is vulnerable to climate changes in turn lowering consumer spending. However India's economy is expected to continue to grow at a rate very close to that of China's. It will be interesting to see how India continues to emerge as a large international economy and how this growth will effect some of the projects and programs we will be researching in India.
http://www.time.com/time/world/article/0,8599,1957281,00.html
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