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Thursday, December 13, 2007

Slowdown in US Economy V/S Boom in India Economy

From past couple of years their has been a gradual slowdown in the economy of US. There are certain reasons for the slowdown of US Economy. With the growth of economies of Asian countries like China and India .Economy of US has a serious threat as these two asian countries have grown at a decent pace in past four to five years while at the same time the economy of US has shown a slowdown. The subprime mortagage crises occuring in US has made several mortagage companies bankrupt and hence looking into the matter the president of US Mr. George W Bush has recently decreased the rate of interest for mortagage facilities available to the people of US. It's now clearly evident that the government of US has started feeling the heat of the slowdown in it's economy. Recently a mortagage services client of indian company Infosys declared itself short of funde i.e bankrupt and had no money to pay to Infosys for the period of time . There were around 250 customer executives working for the mortagage services company in Infosys found there client bankrupt and hence they all had to be shifted to other process hence the subprime crises of US mortagage companies has started affecting the job oppurunities not only in US but also in countries like india where the processes of these banks have been outsourced. hence Slowdown in the economy of US have forced many software companies of US to outsource more and more work outside US in countries like India.

Software jobs in US are also on a decline due to the stagnation in economy. Many US based software companies have all ready opened their development centers in India as carrying business for them in US itself has become less profitable while in India their profit margins are decent and they further can outsource their projects to Indian companies. Boom in Indian Economy has helped India in reducing it's import bills drastically. with the present rate of US dollar equivalent to ~ 39.50 INR and still decreasing further. Time is not far when the economy of Indian would become major Economy of World.

Economists have predicted that if Indian Economy Grows at the Same pace as of today then it would surely surpass the net value of France, Japan by the year 2020, and would become a superpower by year 2025 and India Economy would be third largest economy of world . world would be goverened by three economies of US, China and India, by the year 2035 india economy would surpass the economies of Germany, UK and indian rupee would be used for transactions all over the world.

US market is now dependent on the imports from asian countries like china and India and the volumes of Import from India and China are on a steady rise from the past couple of years. However India economy is still net an importer economy i.e. the imports are still more then the exports but the scenario is soon going to change and India would ultimately become an export economy in coming 10 years. Boom in India Economy is clear from the amount of Foreign Direct Investments being made in India by none other then companies of US since they want higher profits for their further expansions which are not possible while carrying their businesses in US as the profit percentages in US are on a decrease and future looks no better. So these companies have shown their tremandous interest in India and India Economy which is hence on a boom.

India does not have resources of it's own and hence for development it is using the Foreign Direct Investments for it's growth conservatively which is clear as the indian rupee is getting firm day by day . Foreign players have shown tremendous interest in Indian Stock Markets and both of the indian stock exchanges The Bombay Stock Exchange and National Stock Exchange have already crossed the magical mark of 20,000 and 6,000 respectively and are still showing promising signs.

Government of India has also taken promising steps for bringing in more foreign currency to India as investment . The Incredible India campaign is an example and government has many plans to attract foreign tourists on Indian Festivals by providing certain package to the tourists.