Premium Essay

Economic Crisis in India 2012

In: Business and Management

Submitted By rishabhrv
Words 468
Pages 2
Economic Growth Of India In 2011

India has one of the fastest growing economies in the world. The Indian economy is characterized by population bursts, poverty, unemployment and child labour. These rising issues have become a major concern for the Indian economy but yet have proven to bring a raise in the Indian economy for the 2011 year. This economic burst will not be sustainable for the Indian economy in the approaching years.

Researchers have found that India is becoming a very populous nation. It readily has an increasing birth rate and statistics show that the numbers will keep growing. India's population is expected to reach 1.5 billion in 2030, accounting Indians' to occupy 20% of the human population on earth. If the population bursts continue then the economy of India will go downhill. It will have an effect on many factors that play a role in the economy. This will not only make life harder for people who are already on the verge of poverty but make those who are under the poverty line have a harder time surviving.

Poverty is a growing concern in India especially when the nation has been estimated to have a third of the world's poor. Population bursts are causing poverty in the society, making it harder for families to gain access to their daily necessities. The increase in poverty is the leading cause of children being malnourished and underweight. If this continues than there will not be a future generation to run the Indian economy. Due to the baby boomers and poverty on the line Indians' are on high demand for jobs.

The unemployment rate is increasing slowly due to the baby boomers. The poor are looking for any job opportunities viable to the. Although, many don't have the proper education and don't meet the criteria for the jobs due to not sufficient education, a major issue due to poverty. Indian officials need to make more jobs for the

Similar Documents

Premium Essay

Pdf, Doc

...VICTORIOUS TEAM Countries For The Project for the Period 2011 : 1] China 2] India 3] USA Team Members and Students IDS : Nikita Bhivate A2604 ( U.S.A.) Li Jianwei A2394 ( China ) Tingting Hao A2319 ( India ) MBA 531 International Financial Management. Prof. Jayant Kanitkar. INTRODUCTION : Introduction Of China : During the period from 2007 to 2011, the whole world has been suffering from global economic recession and financial crisis. From US subprime to EU sovereign debt crisis, China, as the second largest economy in the world, experienced internal and external economic impacts. In the year of 2007, China’s economic development reached its pick. With the expectation of CNY appreciation, hot money flooded into China. As a result of this, the price of investment asset surged up sharply. The housing price tripled, and the Shanghai stock index reached to a historical level of 6300 from less than 3000 with in one year. The wealth effect from the high investment asset price stimulated consumption. Moreover, China was keeping its high net exports trading volume and fixed asset investment. The GDP growth rate exceeded 10%. However, the financial bubble broke in the US, and a chain reaction directly affected China. In 2008, all economic indictors shown that China’s development slowed down. Stock market can be regarded as the forecaster of economic. The Shanghai stock index dropped to 1900 from 6300. Affected by recession in international...

Words: 4366 - Pages: 18

Free Essay

Business in Asia

...during the global financial crisis has highlighted its flexibility. This flexibility, in part, arises from transformations undertaken in response to the Asian financial crisis a decade earlier.” Student Name: Eric Rodrigues Student Name: Mehmet Edib Unal Introduction The Asian Financial Crisis occurred during the year 1997-1998, and is explained well in brief by Galina Hale “East Asian countries experienced severe banking crises. Nonperforming loan ratios skyrocketed because of prior excessive risk taking and most banks had to be recapitalized by their governments.” (Hale 2011, p.3) After ten years, The Asian Financial Crisis was followed by The Global Financial Crisis in 2008. “The precise genesis of the global crisis remains subject to debate. (Lin 2012, Treichel 2012, p.3) “We will argue that global imbalances were the result of the large excess demand in the U.S. over an extended period—the financing of which was made possible by the reserve currency status of the US dollar. “This excess demand resulted from both the public debt” and “the overconsumption by households.” (Lin 2012, Treichel 2012, p.3) “As shock waves of the global financial crisis (GFC) reached East Asia in autumn 2008 immediately after the collapse of Lehman Brothers in September, the region faced the task of evaluating and reassessing the economic cooperation efforts of the previous ten years” (Katada 2011, p.274) Thus by evaluating and reassessing the economic cooperation of those previous...

Words: 4023 - Pages: 17

Premium Essay

From the Asian Miracle to an Asian Century

...From the Asian Miracle to an Asian Century? Economic Transformation in the 2000s and prospects for the 2010s: Review Essay The chosen article, “From the Asian Miracle to an Asian Century? Economic Transformation in the 2000’s and prospects for the 2010s” by Dr. Yiping Huang and Bijun Wang was published by the Reserve Bank of Australia (RBA) as part of proceedings of their annual conference “The Australian Economy in the 2000s” held by Bank's Economic Group. 1.Introduction The article examines Asian economies key transformation during the 2000s and provides prospects for the next decade. In this review essay, I will summarise the article consistent with sections provided by the article and offer appraisal from the economic and political perspective of the proposed prospects. Post significant transformation of Asian economic during the 2000s, the Asian markets is now major contenders in the global market. Their participation in the global market has reached a point where their actions bring global economic impacts of great consequence for the financial, commodities and goods markets. This rapid expansion into the global market brings concerns of potential global economic crisis. 2. Integrated Supply Chains and Dominant Commodity Consumers Past decade reveals integration of supply chains, industrial restructuring and labour allocation contributed to overall Asia market’s GDP growth with major acceleration from China and India. Vertical integration of supply chains with China...

Words: 1952 - Pages: 8

Premium Essay

Euro Zone

...EUROZONE CRISIS ABSTRACT Euro crisis was not fortunate. It was something that could be avoided if proper care was taken. The European sovereign debt crisis has emerged out of a situation that has made it difficult or impossible for some countries in the euro area to re-finance their government debt without the assistance of third party. It was not only the government sector that lead to this crisis but major cause of it was the private sectors taking up too much of loans. The report also states the impact of euro zone crisis on the world and the India. The Eurozone crisis is systemic in nature. It is a result of policy failures in the way European Monetary Union (EMU) was designed, constructed and implemented. In particular, the crisis is a consequence of the failure to put in place certain necessary institutional components. INTRODUCTION The global economy has experienced slow growth since the U.S. financial crisis of 2008-2009, which has exposed the unsustainable fiscal policies of countries in Europe and around the globe. Greece, which spent heartily for years and failed to undertake fiscal reforms, was one of the first to feel the pinch of weaker growth. When growth slows, so do tax revenues – making high budget deficits unsustainable. The result was that the new Prime Minister George Papandreou, in late 2009, was forced to announce that previous governments had failed to reveal the size of the nation’s deficits. In truth, Greece’s debts were so large that they actually...

Words: 3126 - Pages: 13

Premium Essay

Deprication of Indian Rupee

...The Indian Rupee Crisis Economics Essay-1 In this paper we are going to examine the cause and the impact of rupee depreciation on the Indian economy. Since last few months Indian rupee came under great stress as overseas investors are paring their exposure to Asia’s third-largest economy amid international uncertainty and mounting worries over the domestic economy. In 2009 – 2010 the exchange rate was hovering around the 43 – 45 rupees per US Dollar level. And now it is around 55 – 56 levels, the main reasons to examine are increase in import bill, higher inflation, fiscal mismanagement and all resulting in higher cost of borrowing. The rupee has lost more than 15% of its value this year, making it one of the worst performing currencies in Asia. This paper reviews the probable reasons for this depreciation of the rupee and the outlook for the same. It also reflects on the policy options to help prevent the depreciation of the Rupee. This paper will firstly discuss about the economy of currency to give an overview of the problem and the factors related to it. Afterwards it will be examining the causes of the Indian rupee depreciation with respect to the Indian economy and the global economy. And after that it will analyse the impact of the same on trade and business. Finally, recommending the policy actions in response of the falling currency. II. LITERATURE REVIEW: These papers include the work which have been used as a basis or reference for formulating the policies regarding...

Words: 3340 - Pages: 14

Premium Essay

Briefly Compare the Political Regime Type in China and India. Which of the Two Would You Prefer to Do Business in and Why?

...POLI3001 Assignment No. 2 Briefly compare the political regime type in China and India. Which of the two would you prefer to do business in and why? India and China are two republics that have experienced very opposing political regimes throughout history. China has been fundamentally stable country with a lack of a distinct authority figure (Desai, 2003). Being a single party state China has been controlled by the Chinese Communist Party since the 5th National Congress held in 1927 (Wang, 2013). Correspondingly India, have always been a federal parliamentary democratic republic where the President of India elected is head of state and the Prime Minister elected is the head of government (U.S. Central Intelligence Agency, 2013). This essay will reflect on the political views of both China and India, and attempt to determine why it is more advantageous to do business in India. Government regulation is the process of dissemination, monitoring and enforcement of policy established by appropriate legislation. In, China regulation is central as particular industries are not accessible to foreign investors as the Communist Party aims to restrict external influences on its own population (Desai, 2003). An estimated 90 percent of companies listed on the Chinese exchanges are either partly or fully state-owned (Desai). Retaining a level competition base is significantly reduced, as the chances of competing against a government owned company is more than likely. A good example...

Words: 1484 - Pages: 6

Premium Essay

Assess the General Direction of the Political and Economic Policies Being Followed in Order to Develop the Country (India)

...the general direction of the political and economic policies being followed in order to develop the country. Rapid growth since 1980 has transformed India from the world’s 50th ranked economy in nominal U.S. dollars to the 10th largest in 2005. When income is measured with regard to purchasing power parity, the Indian economy occupies fourth place, after the United States, Japan, and China. Along with growing incomes, India’s increasingly outward orientation makes it an important player in the global economy and the growing optimism about India’s economy has led to a surge in international investors’ interest. Further growth acceleration since 2003 has shifted the debate from a concern about the ability to sustain an annual growth rate of 6 percent to the prospects for increasing this growth rate to 8 percent (Ahmed 2007, Commission on growth and development, Battles Half Won: The Political Economy of India’s Growth and Economic Policy since Independence). The down turn in the economy that appears to have begun in the USA in September, 2008 has had some negative impact on the Indian economy. The most immediate effect of this global financial crisis on India is an out flow of foreign institutional investment (FII) from the equity market. This withdrawal by the FIIs led to a steep depreciation of the rupee. The banking and non-banking financial institutions have been suffering losses. The recession that generated the financial crisis in USA and other developed economies have...

Words: 1183 - Pages: 5

Free Essay

European Crisis and Its Effect in the International Market

...European Crisis and its effect in the International Market After the Second World War, the world was in search of a new alternative to stop with the horrific wars between nations. In 1950, France, Italy, Germany, Luxemburg, Belgium and Netherlands joined in order to obtain peace, protectionism and economic advantage. It was the foundation of the current European Union. This significant moment in history was followed by a remarkable transformation around the world: the globalisation of the market. Globalization was described by Joseph Stiglitz (2002) as “the removal of barriers to free trade and the closer integration of national economies”. This new reality, from local to a global market, made businesses and countries adapt themselves forcing the implementation of new alternatives to survive against international competition and to get economic strength in this new aggressive world. Market competition was no longer limited to country’s borders but it was also suffering from foreign rivalry. The European Union’s countries members were integrated with the purpose to be a unique market being the world major regional trade cooperation. Since its foundation, the Europe Union have been engaged in this integration and it had demonstrated strength in the implementation of a free trade area, controlling a large part of the international market. Although the history of Europe Union had appeared to be a history of success of integration and cooperation, in the last two decades...

Words: 1621 - Pages: 7

Premium Essay

European Union

...to by all EU countries, under which sovereignty is shared in specified areas. The result is a union of 27 Member States covering 1.6 million square miles with roughly half a billion people producing almost a third of the world‘s gross national product and speaking more than 23 1 languages, bound together by a desire to promote peace, democracy, prosperity, stability, and the rule of law. The EU embraces the fundamental values shared by its Member States across a multitude of cultures, languages, and traditions. The Member States agree that democracy is the best form of government. They believe in societies that encourage pluralistic political thought and endorse freedom of speech and religion. They support free market economies—where economic development and growth are driven by the private sector and facilitated by governments. They believe prosperous countries have an obligation to help poorer and less developed regions and nations. And they value living together in peace as well as promoting these principles...

Words: 8089 - Pages: 33

Premium Essay

1234

...communication, financing, insurance, real estate and business services (consumption), said an official release of the CSO on Feb7. "All along I was maintaining it should be around 8.5 per cent plus; 8.6 per cent is accepted," MrMukherjee told the Press Trust of India adding, "Now the other issue is inflation, (demand-pull, AD SHIFT RIGHT) trade balance... these are to be addressed." The gross domestic product (GDP) estimates are higher than the predictions made by the Reserve Bank of India and the finance ministry but are also an indication that the economy had slowed down somewhat in the second half of the current financial year. The latest GDP growth estimate of 8.6 per cent for the entire fiscal year implies that the pace of economic expansion slowed in the second half of 2010-11, given that GDP growth in the April-September 2010 period stood at 8.9 per cent. ING Vysya Bank economist Deepali Bhargava told The Indian Express that the high growth estimate would have a tremendous impact on budget decisions relating to fiscal deficit and tax. "The CSO estimate is pretty much in line with our forecast of 8.7 per cent. There could be some upside revision in the figure later on," she said. Chief economic adviser to the Indian government Kaushik Basu admitted inflation was a concern but...

Words: 2272 - Pages: 10

Premium Essay

Viva

...PREPARED BY : KHAIRIL AZMAN BIN RADZALI 2010459076 DHARWIS BIN HASNIM 2010699142 MUHAMMAD FAIDI BIN SAFARRUDIN 2010408132 ELMIRUSHUDA BINTI AMERUDIN 2010248112 FAZLIAH NOOR BINTI MOHD FOUZI 2010834506 GROUP : JBM114 6A DUE DATE : 21st DECEMBER 2012 ECONOMY ANALYSIS 1.0 WORLD ECONOMY The world economy can be evaluated in various ways, depending on the model used, and this valuation can then be represented in various ways. It is inseparable from the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economy – even if currently exploited in some way – and could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention. It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures...

Words: 9551 - Pages: 39

Premium Essay

International Finance

...1. Introduction To understand into the trend of European currency change nowadays, the origins of the Euro (€) had been studied. From the background of Euro, initial idea for the creation of Euro can be trace back to 1979 when European Union (EU) set up European monetary system (EMS). Due to the successful of EMS, the European Union decided to form the Economy and Monetary Union (EMU) to create Euro in December 1991.The main advantages and disadvantages of a single currency for the countries and the zone had been analysis with the macroeconomics knowledge that has learnt from this course. The advantages mainly help to eliminate the floating exchange rate, transaction cost and price transparency, whereas the disadvantages include loss of sovereignty, cost of Euro and budget position. Thus, the significant influences of Euro dollar from birth to now, it can be known that Euro currency is defined under flexible exchange rate system. With flexible exchange rate, the currency can be effort between the capital movements, tax and subsidize international trade and therefore the currency from overseas will influenced the demand. 2. Analysis 1. History of Euro In January of 1999, single currency, Euro has been introduced by members of European Union. It has been approved by Maastricht Treaty and used by its members currently who called as Eurozone. Those members consists of 16 members which are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg...

Words: 2771 - Pages: 12

Premium Essay

Economy in Inia

...In the last seven years or so (i.e., since 2004) India has emerged as one of the fastest growing economy of the world. In fact, next to China, India’s growth rate since 2004 is the highest in the world. This is often referred to as India’s growth miracle. Before Eighties of the last century India’s average growth rate stuck around 3.6 per cent per annum which Late Prof. Raj Krishna called Hindu rate of growth. In the eighties India’s average rate of economic growth rose to 5.6 per cent per annum and further in the nineteenth and up till 2002-03 (i.e. in 12 years period). India’s average growth rate went up to 6.2% per annum under liberalisation and globalisa­tion of the Indian economy. But since 2004 to FY 2007-08 India’s average annual growth rate of GDP rose above 9 per cent per annum. In 2008-09 while the advanced developed countries were experiencing recession (i.e. negative growth), India succeeded in achieving 6.7 per cent growth in 2008-09 which further rose to 8.4 per cent in 2009-10 and 2010-11. However, for the reasons explained later, estimated rate of growth of GDP in 2011-12 fell to 6.5 per cent and for 2012-13 also India’s growth rate is again estimated by Reserve Bank of India to be 6.5 per cent.Rate of Domestic Saving and Fixed Capital FormationNow the question is how do we account for such a high growth in GDP from 2004-05 to 2010-11. Growth depends mainly on rate of saving and investment (or, in other words, on rate of capital formation), and improvement...

Words: 2018 - Pages: 9

Premium Essay

Economic Survey

...India and the Global Economy 14 CHAPTER The big story of the last decade for India has been its arrival on the global scene. The Indian economy had broken free of the low-growth trap from the early 1980s. By the mid-1990s, following the economic reforms of 1991-3, India began to appear as a player of some significance in the global economy. Then, following the East Asian crisis of the late 1990s, and from the first years of the first decade of the 21st century there was no looking back. India’s exports began to climb, its foreign exchange reserves, which for decades had hovered around 5 billion dollars, rose exponentially after the economic reforms and in little more than a decade had risen to 300 billion dollars. Indian corporations that rarely ventured out of India were suddenly investing all over the world and even in some industrialized countries. When, in 2009, the Group of 20 (G-20) was raised to the level of a forum for leaders, India was a significant member of this global policy group. 14.2 The globalization of India has given rise to new opportunities but it has also brought with it new challenges and responsibilities. It means that the global economy can no longer be viewed from a spectator’s standpoint. What happens there has large implications for India. Every time there is a major financial crisis anywhere in the world, there is need to take brace position. And, in turn, the rise and fall of India’s growth rate has an impact on global growth and there...

Words: 14217 - Pages: 57

Premium Essay

Indian Economic Environment

...INDIAN ECONOMIC ENVIRONMENT The Economy of India , ninth largest in the world by nominal GDP and third largest by purchasing power parity (PPP), is going to touch new heights in coming years. The history of Indian economy can be broadly divided into three phases: Pre- Colonial, Colonial and Post Colonial.  Pre Colonial: The economic history of India since Indus Valley Civilization to 1700 AD can be categorized under this phase. During Indus Valley Civilization Indian economy was very well developed. It had very good trade relations with other parts of world, which is evident from the coins of various civilizations found at the site of Indus valley. Before the advent of East India Company, each village in India was a self sufficient entity. Each village was economically independent as all the economic needs were fulfilled with in the village. Colonial: The arrival of East India Company in India ruined the Indian economy. There was a two-way depletion of resources. British used to buy raw materials from India at cheaper rates and finished goods were sold at higher than normal price in Indian markets. During this phase India's share of world income declined from 22.3% in 1700 AD to 3.8% in 1952.  Post Colonial: After India got independence from this colonial rule in 1947, the process of rebuilding the economy started. For this various policies and schemes were formulated. First five year plan for the development of Indian economy came into implementation in 1952...

Words: 1196 - Pages: 5