October 27
This is an interesting article from Businessworld
http://www.businessworldindia.com/nov0104/indepth02.asp
I agree with his observations that the Congress/Left government is
likely to cause growth to decline; this is supported by the Reserve
Bank's announcement on Oct 26th that it was downgrading GDP growth
projections for this fiscal year from 6.75% to 6.25%. the RBI also
expects inflation to go up. The Left does not want growth or poverty
alleviation, because it feeds on poverty: if the poor got wealthier,
what would the Left's raison d'etre be?
On the overall question of whether manufacturing is being pushed too
hard and services are being ignored, there is good news and bad news.
If the government doesn't think much of services, it will continue to
leave that sector alone, that is the good news. Also the other bit of
good news is that some manufacturing sectors have really started
looking up: eg. auto/ancillaries, pharma, steel. The bad news is that
infrastructure growth is being stymied: eg. this govt does not want
the Golden Quadrilateral of national highways to come to fruition as
it was the previous govt's idea. Also, FDI caps on aviation, power,
ports, etc. are too low to attract enough players. The govt really has
to decontrol as it did successfully in mobile telephony (I think India
is the fastest growing mobile telephony market with 100% annual
growhth these days albeit from a small base).
Rajeev
No comments:
Post a Comment