Grant Thornton’s International Business Report (IBR) has, for the 4th consecutive year, forecast an optimistic outlook for the Indian economy. India will have a growth upwards of 8 percent compared to China’s projected double digit growths. The Indian Express points out that India has been relatively unaffected by the sub-prime crisis in the US or any serious credit crunch. Yet the lingering fear remains that Foreign Institutional Investments may decline and that might crash the bullish stock markets.
This in turn, will start a ripple effect, which will impact the general economy. Warren Buffet has a simple advice for all optimists: what goes up must someday come down. The IBR report should be analyzed with caution. It underestimates the influence that developed economies have on India.
India Inc. is shining and everyone is happy. This is the gist of most of the economic reports that are being churned out by international rating agencies. This has an effect of lulling us into thinking that everything is well for us. These reports avoid mentioning the growing disparities between the rich and the poor. They seem to rely too much on the famous trickle-down effect.
If some people have an increase in wealth, then certainly those near the poverty line will have something trickling down to them. There is a fallacy here. Mean wages for the low-paid jobs have not increased. Only job opportunities in the lower levels have increased. India Inc. is only an infinitesimally small percentile of the population of India.
The IBR report presents various statistics to show the general well-being of the nation. But, its vision of India is myopic in excluding the poor. It is easy to forecast China and India’s rapid economic growths without mentioning how the underpaid millions of workers sweat it out in inhuman conditions. It is easier to quote a few billionaire businessmen and forget the poor who live like cattle on our streets!
This is why reports like IBR are simply not acceptable. India Inc. is shining, while India is losing its sheen!
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Via: Indian Express
