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Is India a Bright Spot in the World?
Thu, 21 Jan Pre-Open

Markets are crashing all over the world. Many investors have lost a lot of wealth. It's normal for people to feel despondent. The economic news is bad. Talk of a recession is doing the rounds. It's difficult to believe India can hold its own in such a situation. But it is possible. In a world of financial turmoil, India seems to be an island of stability.

None other than 'Dr Doom' Nouriel Roubini thinks so. As per an article in the Economic Times, the man who is often called a 'permabear' for his cautious views, is bullish on India. He believes, India can be one of the bright spots in an otherwise gloomy world.

But it won't be easy going for our economy. Structural reforms are the need of the hour. Roubini is quite clear on this. India needs to liberalise its labour market, increase efficiency of its bureaucracy, improve ease of doing business, encourage competition, innovation & investment, and curb inflation & corruption.

Presently, India is experiencing a huge dose of luck due to falling commodity prices, especially crude. Unfortunately, the pace of reforms is very slow. We agree with Roubini when he says that the world has entered a 'new normal' of low growth for many years to come. In this environment, India does have the potential to stand out from the crowd.

But a lot more needs to be done before that comes about. The crash in commodity prices will not last forever. The government is struggling to achieve its fiscal deficit targets. Trade (both exports and imports) is falling. Stalled projects are yet to pick up. Inflation is yet to be fully curbed. Job growth is muted.

We believe the Indian economy is on the right track. However, the pace of improvement is excruciatingly slow. While we don't expect too many big bang reforms, we do expect the government speed up the process of effective governance. Otherwise, India may miss this golden opportunity to put its house in order.

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Mar 20, 2018 (Close)