While there is a global recession and crisis, India is one of the few countries that continues to grow. Most of the current growth is driven by domestic factors in India, not by exports. Finance-dependent industries such as automobiles and real estate have slowed. But so much of the Indian economy has always run on cash payments; some of this is due to cultural factors; the “underground economy”, ie people who want to avoid taxation and records are another factor. The underground economy is usually an embarrassment to India, but in this situation, may be a source of resilience.
With China’s export-dependent growth rate expected to decline significantly, major press is predicting that India may emerge as the fastest-growing major economy in 2009. But The India Expert is not impressed; the misery of others is no cause for celebration. This isn’t a horse race with a prize money. Besides, being first will give India’s government the sense that they can ease up on reforms, wastage and delays.
India’s potential continues to be underutilized. Its entrepreneurs and executives are capable of much more. When the number of Indian living in poverty drops to under 10% of the population, there will be cause for jubilance. There’s a long road ahead.
