India May Escape the Greek Tragedy

Meena Rani K — Fri, 07 May 2010 01:55:03 +0000

The Greek debt monster has raised its head once more to wreck havoc in markets across the globe. Indian markets too suffered on account of this. However, India’s strong economic growth coupled with domestically-funded fiscal deficit may provide the country ample cushion to escape unhurt, in case the European fiscal crisis worsens, says a report from Citigroup.

The report elaborates, “Although India, with a fiscal deficit forecast at 8.5% in 2010, may seem vulnerable to any worsening of the European fiscal crisis, its strong growth trajectory should ensure that its debt dynamics remain stable, while its deficit is primarily domestically-funded.”

The European fiscal crisis is happening as a result of heavy borrowings by the governments of countries such as Greece, Portugal and Spain. As the borrowings are international and not restricted to the concerned countries, the crisis is affecting economies all over the world. Experts opine that economies with high deficits are the most susceptible to the crisis.

India’s fiscal deficit is a matter of concern with the forecast for 2010 pegged at 8.5%. However, the country’s deficit is basically domestically-generated and hence may not add fuel to the crisis.

The report classifies economies as ‘overweight’ or ‘neutral’ in terms of the European crisis. Among the 22 economies covered by the report, India is in the ‘neutral’ category along with China, Chile, Mexico and South Africa. The ‘overweight’ economies are Taiwan, South Korea, Russia, Brazil, Turkey and Thailand.

However, Indian economy may not escape unhurt altogether. There is bound to be some impact. The affected will be companies having trade relations with countries in the European zone. One of the major fallouts will be fluctuations in currencies.

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Bad Roads Bleed The Economy Dry

neha — Tue, 24 Nov 2009 15:47:18 +0000

Though it seems highly unlikely, India’s economy has a new antagonistic presence – that of the country’s throbbing veins – the road network. The plans to expand and strengthen the national highways have so far been over ambitious. Even today, as India strengthens its presence as an international trade entity, the internal trade suffers because of poor quality roads and a sordid state of affairs as far as the national highways are concerned.

A brief look at statistics simply reasserts the worst. While in developed countries, goods carrying trucks are able to cover about 800 km per day, Indian trucks are only able to cover about 350 Km per day on an average. This is because the roads are so bad that the average speed is a mere 20 Km/hr.

There has been some development in this regard. However, poor road conditions continue to wreak havoc for those whose livelihood depends on transportation of goods. Besides the low speed, there are also delays at every checkpoint where not only are truck drivers detained indefinitely, but money is also demanded of them.

A recent study has shown that every year the economy loses out on about $600 million because of the constant delays. This however is not all. One can add about $5 million that is wasted in terms of fuel because of the stoppages and the slow speed.
The volumes of the freight keeps on increasing by about 9.06% every year. However, as compared to the increase in the volume, only about 3.77% of roads are added to contain the volume every year.

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Blog of India » Havoc

India May Escape the Greek Tragedy

Bad Roads Bleed The Economy Dry