Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Looking Beyond BRICS: The MINT Grouping The BRICS or the acronym given to the grouping of Brazil, Russia, India, China, and South Africa in so far as promising economic growth is concerned, has now reached a stage where global investors are on the lookout for the next emerging economic hotspots. Indeed, for much of the […]
Some Real World Examples of Person Dependence and its Perils A common problem across organizations in the contemporary corporate world is about person dependence and the ways and means to manage person dependence. The term person dependence refers to the phenomenon wherein the organizations are overly dependent on individuals for their success and even for […]
The trade war between China and America seems to be getting worse every day. When negotiations between Trump and Xi Jinping were happening, the entire world was waiting with bated breath. A stalemate seemed like the most likely outcome, and that seemed to be the best result that all the concerned parties could have hoped […]
The Importance of Trust in Building Successful Companies and Great Nations Recently the former Prime Minister of India, Dr. Manmohan Singh, made an impassioned plea for building trust among the economic agents and between the citizenry as that would have a salutary effect on the country’s economy. In a hard hitting article, Dr. Singh, decried […]
From Oxcart to Wal-Mart As more and more international retailers make a beeline for emerging markets like India, China, Nigeria, Mexico, and other markets, it is important for these retailers to embrace the chaos and duality that is inherent to these markets. For instance, in India, more than 95% of the retail market is dominated […]
Much has been written about the way in which India was one of the few countries that was relatively unscathed because of the global economic crisis. Most of these narratives focused on how India managed to weather the storm in the dark days following the collapse of Lehmann Brothers. However, it cannot be completely said that the worst is over for India as events of the last few months have indicated.
Starting with the rating agency, S&P (Standard & Poor’s) downgrading it to the runaway inflation that has plagued the country, there have been other economic indicators as well that do not bode well for the future of the economy. Given these factors, it is too early to say that India is out of the woods.
However, a noteworthy aspect of the global economic crisis has been the way in which global banks nearly collapsed and had to be bailed out by their respective governments. It is to the credit of the policymaking elite in India that they did not allow the trading of derivatives that were responsible in part for the global economic crisis.
Further, the fact that the RBI (Reserve Bank of India) and the Finance Ministry took steps to ensure that the banks are adequately capitalized as well as ensuring that they set aside a portion of their capital towards statutory requirements has meant that the Indian banking system did not suffer the fate that many countries in Europe and especially the United States were faced with in the aftermath of the crisis.
It is important to remember that the Indian government did respond with a stimulus package and has followed a rather loose monetary policy, in the build up to the crisis. This has meant that the growth that India has experienced has been partly due to the availability of easy money.
And the fact that the RBI is now following a tight monetary policy is an indication that it recognizes the severity of the problem of inflation. This is one aspect that needs to be watched over the coming months.
Apart from this, there is the aspect related to the way in which India is not overly export dependent like China and hence, if the foreign exchange reserves and the balance of payments along with the current account deficit are managed properly, there is no reason why India can breathe easy. However, the recent gyration in the value of the Rupee that has fallen steeply against the Dollar means that this aspect needs to be watched as well.
In conclusion, the experience of the Indian economy in the aftermath of the global economic crisis has been mixed and though there some notable positives there are downsides as well. It is for this reason that the recent pronouncements from the Prime Minister and the Industry Captains against policy paralysis needs to be seen in the context of the revival of the India story. What happens next is anybody’s guess but it is fair to say that the golden years of growth might be behind us.
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