X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
Investing in India? Get Equitymaster Research  
Back to pre-crisis growth levels? 
(Tue, 9 Mar Pre-Open) 
 
Judging by the way India's growth has accelerated in the past few quarters, it appears that the economy is on the path to a recovery. But will it be able to grow in the future the way it had before the crisis erupted i.e., at 9% plus levels? In the medium term at least it would appear unlikely, says Ruchir Sharma of Morgan Stanley in an interesting article published in the Economic Times.

Although India and the faster growing emerging markets did not have to suffer the same fate as the developed world, much of the growth had come in due to Americans going on a splurge. After all, interest rates in the US were at an all time low 2003 onwards and this spurred growth in the emerging markets as well. Further, corporates in the developing world raised huge amounts of debt and equity capital to fund their ambitious growth plans, largely from western financial institutions.

Of course, it appears that the emerging nations might retain some of their lost glory. But there is one big change. That is the considerable rise in government debt, which has been a result of stimulus packages pumped into economies. Thus, an expansionary monetary policy has, among many things been responsible for the strong revival in growth seen in emerging economies including India. What it essentially means is this – while there are talks about growth in the developed world reaching a 'new normal', it may not be possible for emerging nations such as India to grow at a rate approaching that of the past (namely 2003-2007).

Having said that, while India's growth rate may not be in the region of 9% plus, it would still be enough to make the developed world envious of it. Moreover, we believe what will push India's growth to a higher trajectory is the growth of infrastructure and the obliteration of corruption. Other means such as following a loose monetary policy will only give rise to other problems notably inflation.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives  RSS
Read the latest Market Commentary
 
BSE-30
 

 
Go
 

Equitymaster requests your view! Post a comment on "Back to pre-crisis growth levels?". Click here!

1 Responses to "Back to pre-crisis growth levels?"

Anil

Mar 8, 2010

I want India IIP data year on year from 2004 to till 2010

With Regards,

Anil

Like 
  
Equitymaster requests your view! Post a comment on "Back to pre-crisis growth levels?". Click here!
 

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Aug 24, 2017 02:28 PM

MARKET STATS