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Global economic meltdown has
affected almost all countries. Strongest of American, European
and Japanese companies are facing severe crisis of liquidity and
credit. India is not insulated, either. However, India’s
cautious approach towards reforms has saved it from possibly
disastrous implications. The truth is, Indian economy is also
facing a kind of slowdown. The prime reason being, world trade
does not functions in isolation. All the economies are
interlinked to each other and any major fluctuation in trade
balance and economic conditions causes numerous problems for all
other economies.
According to official data, industrial growth in august has
plummeted to mere 1.3% compared to the same month in 2007. That
definitely is cause of concern for policy makers and industries.
This data also raised fear of low GDP growth of India. It is
being suspected that, our country will face huge problems in
achieving even 7.5% growth rate in this fiscal.
1.3 percent industrial growth is the lowest IIP (index of
industrial production) data ever registered since last ten
years. April-august industrial growth rate is 4.9% which is also
the lowest for the first five months of a financial year in
14-year period except 1998 and 2001. To make matters worst, a
member of the PM’s economic advisory council and director of the
National Institute of Public Finance and Policy have confessed
that India is going through industrial recession.
Several crucial sectors of Indian economy are likely to face
serious problems in coming months. Foremost among them is real
estate sector. The demand for houses have reduced significantly
and property prices across India has registered 15-20% fall.
Things are likely to get worst as another 20 percent drop in
prices is quite possible in coming six months. The woes of real
estate have spread to construction industry as well. Because of
less demand for houses, construction companies are going to
suffer big time. Financial services segment is also likely to be
a major victim of economic slowdown because of less demand for
credit and reduced liquidity in market.
These three segments account for almost one third of services
GDP and because of their current and impending plight, attaining
7.5% GDP growth in this current year is quite improbable.
Industrial slowdown will also affect transport services.
Transport companies are likely to witness drastic fall in their
business and profits. Global recession will also lead to less
tourists coming to India. That will negatively affect tours and
travels industry. Author - Mritunjai kumar,
expert economist and prolific writer..
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