I would say a
big NO. I might sound a little pessimistic I know, but I have reasons
for that.
First, if we
see Inflation, it has always been a concern for India, which will cause lots of
problems to the economy and it is mainly caused due to increase in oil prices. Even
the prices of milk, and vegetables have increased. So, typically, middle income
and lower income people have to face numerous problems, as their expenses are
more, but the income is the same.
So then, the
next billion dollar question is what RBI will do? Due to inflation pressure, the
RBI increases the repo rates in order to tame the inflation. But the problem here
is tightening monetary policy will affect the growth of the economy. If the Repo
Rate is hiked, banks will increase the lending rate to corporate firms that in
turn will decrease their profitability. This may also lead to less employment
generation. Thus it reduces tax income for the government. This will led to another problem of increase in fiscal deficit
After all this,
still if you are optimistic, give the following points a quick thought: Corruption
and Scandals are becoming synonyms to India which will reduce the confidence of
the FII to make investment in India. For instance, the 2G Spectrum Scandal,
Commonwealth Games fiasco, etc. You may ask why I should consider FII
investments to be important? This is because, our market is mainly controlled
by FIIs, and hence they decide whether the market should go up or down
Are you still
confident? Let me give you one more dimension of India: The inherited problem
we have which we have not solved for decades like Infrastructure and Power will
require huge spending from government, which means more loans.
But people say
India is growing. However, I have my own doubts on whether I should invest in
this country…..let us know your thoughts on this.
Hi BBW,
ReplyDeleteIndia still has the highest rate of interest for deposits.
Indian middle class is growing, and so is the income level.
Govt is going to spend more on Infra, education, etc.....
There are more MNCs in India, than in anyother SE Asian nation (?).
Think about it!!
hai....
ReplyDeleteIn my opinion India is growing,but really at a slower pace.Though per capita income of India has crossed Rs 50000, the IT slab rates are increased in every budget session.This wide gap has to be looked upon.
FIIs and FDIs still feel India as a profitable nation to invest because of our growing demands and higher contribution of youth to our population.
Yes, I think Chitra has a very valid point.
DeleteThere would not be investments coming into India, if we are not attractive as a business centre.
The idea of Demographic Dividend is also worth pondering.
I think India is a good investment center. Since the big markets like UK, USA and others are saturating, most of the FDI's are turning towards India to make use of the prevailing demand for branded products. So, sure India could see a good economical growth. But my doubt is "Will the political government and their policies in India support that? Do they make use of the demographic dividend?" Even though they have enough funds for providing freebies to the public for capturing the power, why they are not focusing on infrastructure development.
ReplyDeleteI was disparate to find answer to this question as I was looking at my people in the native and their unchanged quality of life since a decade. I strongly feel we are made to think that we are developing based on irrelevant statistics. Doesn't the living standards like - better transport, power supply, safe drinking water, better education system be a part of the measure?
ReplyDelete