India Compendium

Asia Pacific

Economics
11 December 2009  72 pages

India Macroscope
Looking Back at 2009…and a Peep Into 2010*
 2009 elections − ‘one small step/vote for Indians, one giant leap for India’? The election result which brought the promise of politically cohesive and decisive governance – and all that goes with it – probably defines 2009. Will it? - The market, the economic growth revival, the flowing (again) capital and of course the analyst and press communities have given their verdict. But 2009 is not the time for judgment…the decade ahead is.  It’s probably ‘glocal’ — 2009 probably ends the ‘Is India a Global vs. Local’ debate – it’s both. There was no escaping the Global gore: Capital outflows (and slumping markets) – debt and equity, faltering trade, rising risk perception and confidence issues. But there was no sidestepping the Local: domestic demand bounced back relatively quickly, the domestic system provided the capital, and the billion continued to consume even as the most local of phenomenon (monsoons) played truant enough to lower growth and dampen confidence. You can and will run on Domestic, but you can’t hide from Global.  Collateral damage – battle or war? India suffered collateral damage because of the Global crisis: job losses, collapsing commodity prices, deflation, protectionism – and some of this pain lingers on; fiscal strain, tighter regulation and cautious lending. But is this collateral damage a battle scar – done and over with, or is it just early damage in the global economic war zone; 2009 raises only the questions.  ‘Inclusive Growth’ – free meal, or freedom to more than a meal? We believe 2010 will be defined by the new Government’s ‘Inclusive Growth’ mantra. This means more social investing (Rural development, Education, Healthcare.) and in economic terms risks turning out to be a free meal (and we know there is no such thing)...its vision lies in giving a billion Indians the freedom to much more than a free and easy meal.... [continues]

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