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
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

India's high growth ambitions shattered?
Mon, 2 Jul Pre-Open

It has not been very long since we heard talks on India's double digit growth prospects from all corners. Experts utilized every opportunity to highlight India's prospects of witnessing spectacular growth in ensuing future. However, once the global debt crisis made its intensity known, the same experts were quick to change their opinions and tone. Nevertheless, our optimistic government agencies from the Finance Ministry to the Planning Commission of India, kept the dream, albeit unrealistic, alive.

In its October 2011 report "Approach to the Twelfth Five Year Plan", Planning Commission stated that having achieved 8.2% growth during the Eleventh Plan, it is reasonable to aim at 9.0% growth for the Twelfth Five Year Plan (2012-2017). It added that the target is ambitious but it is not impossible.

However, if the recent statements made by Mr Montek Singh Ahluwalia, Deputy Chairman of Planning Commission, are anything to go by, the ambitions of the Indian government seems to be completely shattered now. So are the hopes of double digit or 9% annual GDP growth. According to him, even 8%-8.5% GDP looks ambitious now. And we could not agree more.

True, the slowdown in the global economy has affected the growth of the Indian economy. However, the government is failing on the growth front majorly for its own policy logjam and corruption issues. The debate over whether the Planning Commission should revise its growth target downward or not would be hardly meaningful. The roadblocks for the growth are already glaring. What is important for the government is to get its act together.

We have spoken about the state of policy paralysis several times. But now the Indian economy is not just facing acute fiscal deficit, but there is also a problem of rising trust deficit. Investments are getting dried up. There is a lot of confusion in the investors' mind.

A strong and reform focused leadership is the need of the hour. The Indian economy may not be in a situation to traverse high growth path in the present circumstances as rightly pointed by Mr Ahluwalia. However, it would certainly be timid to accept a dismal growth rate of around 6% to be the 'new normal'.

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

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "India's high growth ambitions shattered?". 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


Oct 17, 2017 03:35 PM

MARKET STATS