View: How India's economy came back down to earth


India's economy lost its sheen this year. As it stumbles through a deep slowdown and a credit crisis, the country has gone from being hailed as a colossus-in-waiting to placing among the also-rans.


Rarely has a major economy had such a humbling turn in fortunes. In the third quarter, gross domestic product rose 4.5% from a year earlier, about half the pace notched in the first part of 2018. Consumer confidence has tumbled to the lowest level since 2014. The labor market, a vital indicator in a country with a population of 1.4 billion, is fragile: The jobless rate has climbed to a 45-year high of 6.1%.



Just last year, India was the world’s fastest growing major economy. The past decade has been replete with predictions it would take up an increasing share of global commerce, alongside and America. But the Philipes and Indonesia grew quicker than India last quarter and Mysia was just a hair behind. , grappling with its own slowdown, logged a respectable 6% and Vietnam was way ahead at 7.3%.


Much of this comes down to the country's broken financial sy em. Indian banks struggle with a load of bad loans that's among the biggest in the world. Overextended traditional lenders gave way to shadow banks. They, too, ran into walls. One of the most prominent, Infrastructure Leasing & Financial Services Ltd., defaulted last year, setting off a liquidity crisis. While the go nment took control of the company in an effort to contain the dge, their work was just begng: Last month, the central bank removed the management of Dewan Housing Finance Corp., a big player in mortgages, and sent it to bankruptcy court. Lenders have pulled in their reins across the board.

这在很大程度上要归咎于印度支离破碎的金融体系。印度的银行正与世界上最庞大的坏账做斗争。过度的传统放贷机构让位于影子银行。其中最著名的基建租赁及金融服务有限公司去年违约,引发了流动性危机。虽然政府接管了这家公司控制损失,但他们的工作才刚刚开始:上个月,央行撤掉了抵押贷款领域的大公司Dewan Housing Finance Corp.的管理层,并将其送上破产法庭。放贷机构已经全面收紧了控制。

Alarmingly for the Reserve Bank of India, these clogs in the financial pipes mean five interest-rate cuts this year haven't packed much punch. Despite early and aggressive action to lower rates, all the benefits of looser monetary policy aren’t flowing through to the real economy. In difficult times, central bankers usually keep a firm and credible hand on the rudder. But the RBI has surprised investors a few times this year. An unusual 35 basis-point cut in August, rather than the quarter percentage point economists anticipated, looked frivolous rather than clever. A reduction this month seemed like a sure thing until offi als balked. That was a shocking mistake.


This slump doesn't have to be the end of India's run. As wrenching as the Asian financial crisis was for the “tiger economies” of Indonesia, Thailand, Mysia and South Korea, they emerged stronger after painful recessions. Offi als bolstered reserves, constrained foreign-currency borrowing and scrutinized de t levels while central banks became more independent. While growth is lower in the aftermath, it’s also more sustainable.


India will always be more important to the world economy than the Philipes or Mysia. Even if activity slows to a snail's pace for a while, its sheer size makes its contribution to global growth far more valuable. As soon as next year, India's monetary and fiscal stimulus will begin to kick in. The economy will likely grow about 5% this year and pick up to 6% in 2020, says Shilan Shah of Capital Economics.

对世界经济而言,印度永远比菲律宾或马来西亚更重要。即使经济发展速度放缓,其庞大的规模也会使其对全球增长的贡献变得更有价值。印度的货币和财政刺激最早将于明年开始生效。Capital Economics的希兰•沙阿表示,今年的经济增长率可能在5%左右,到2020年将达到6%。


译文来源:三泰虎     http://www.santaihu.com/49105.html      译者:Joyceliu

Arcane 777

It does not matter how great your economic data is unless you curb rampant co ption which India is well known for. This injury will reduce all the gains to zero if not dealt with decisively.



Ahmed Marecar

India economy operates direction not satisfied.



Melman Const

RBI reduced interest rate, public tightened their spending. RBI thought India is like Japan or USA.




It has reached the core magma long ago!



Sujith Ram

Let go nment form a joint action committee consists of opposition leaders, distinguished economists ,Financers& agriculturists and representatives of MNCs to tackle the situation.



Nilesh Khedikar

To address the problem of npa, what India needs is PCR - public credit registry which can mon or all loans real-time and help track such frauds with automation



Aam Aadmi

Hopefully next year India will perform well !



G.Ranga Chary

Export oriented economies suffer more in their growth rates, when world economies face recessionary conditions, not withstanding the form of Go nment they have, Viz. Democratic, or otherwise.Till introduction of economic reforms in India in 1992 and integration of Indian Economy with International Economies, software exports' contribution in GDP growth increased to more than 50% and this is main cause for fall in growth rate of our economy for the last few years. Adding to this manufacturing sector's ever falling growth is resulting in increased unemployment and decreased consumption demand, leading to further crisis.The long term solution to this problem is to develop India's domestic market, by initiating suitable policy measures.



Indian Soul

You are Sir. We must also read the status of Imports also.As all know, India is a consumer country where we imports more than export.Weak performance of INR in FOREX ag inst USD leads to price hike as well. Importors are forced to make payments more in INR value for goods. But crude oil price was almost stable in past couple of months but started raising now which will be double impact to fragile Indian economy.



Joji Cherian

"Here’s a de acy with a robust federal sy em and an independent judiciary, they argue". Robust fedral sy em? We watch it every day."an independent judiciary" We saw in Babri Judgment how independent just it was. petition 370 abrogation. still pending after 5 months.



Behead This Traitor

There is a common knowledge that When people have no rational, logical, reasonable arguments they resort to name calling. At least pay tax if you can't contribute positive. At least remain silent instead of unleashing negative forces.



Saji Shayam

Pal, Don't mix your po itical ideologies with economics &finance which is a grey area for your leaders..You just attend po itical lectures from your dimwit leadership. Stop acting as a saviour of Hinduism & nation.Bring up reading and learning habit and start reading books other than your mouthpiece articles also watch/listen other shows than "Mann Ki Baath".All the best.




Industry is not growing, No innovation, High Income Tax, High grocery price. Overall economy falling.



Harivadan Dl

Dear writer, please go and save Britain.



Thangjom Chelmang

India is occupied by Hindu Te rorts



Venkatesh Babu Kr

For the amount of contradictions they have in the society, and for the amount of co ption each individual can do, who will trust pseudo Hindus?




You sound like a frustrated one who could not compete in school and college.I am from a Brahmin family. Studied engineering with National scholership. Completed MTech from IIT Bombay. I have worked for last 25 years outside India and invested most of my savings in India. I will return to India after retirement.



Think Tank

Sanjeev you are brilliant. And given rupee has depreciated your investments in India is worth peanuts. Good luck investing and making money in India. In India buying a 1 crore 2 bedroom apartment for which less than Rs 20,000 per month rent is called investment. Utter nonsense



Som Nath Sharma

India is in the pain for the last five-six years. The falling rate of growth combined with job loss and a slump in exports and de-industrialisation.India needs well informed leadership with sound understanding of issues involved.



Thangjom Chelmang

What about Hindu low breeds from upper caste that occupy all the posts in go nment & screwed up everything from incompetency, co ption & favouritism. Your knowledge is screwed up & shallow. Shame on your calibre



Kavi Tanna

Is there a slowdown? Hmmm I didnt realize with the hundred 20 articles written every day about it.



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