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Saturday, July 27, 2013

Fundamentally weak economy like India can never grow as policies affect

In last couple of decades in world economic history, only one country stands out ie 'CHINA', In developing it's highly competitive manufacturing based economy especially in Consumer electronics and in all the sectors, China has become lone manufacturing hub of the world. You see any thing and it's 'MADE IN PRC' written all over it. Indian economy has never cleared even the heats to compete among the top manufacturing countries.

Recent turmoil in Indian economy (with USD reaching 61 INR levels) is a testimony to fundamentally weak economy. We can boast only of services sector alone, but services sector can never be considered as helpful in creating a fundamentally strong economy. Indian market has become a puppet in hands of foreign players and government an agent in helping them establish their footprint.

Other thing which adversly add's to fundamentally weak economy is the high level corruption which prevents foreign companies to invest in India. When Indian government wanted to dis-invest some stake of PSU recently, there were hardly any takers for the freed share. This is because FII's fear that government would sleep and do nothing in making the employees of PSU's competent. Union ministers donot give clearance to Foreign projects until their portion of bribe has been transferred, social groups come in for halting the development of a financially weaker area etc etc.

Many of the small scale manufacturing units have closed down in recent past only because instead of making their own products they are now acting as import agent and have starting importing their products from China, this has effected manufacturing capacity of Indian economy very badly, there are job losses(direct and in-direct job loss). recently one of my relatives who is manager of a company which is into Container manufacturing business noted that, the container which has least manufacturing cost of 2.25 lac's when manufactured in India, can be imported from china with all inclusive price(shipping, import duty etc) of 1.75 lac's. This has further hampered growth of heavy industrial goods manufacturing in India. Prices in India is higher due to corruption in the working system of the country.

We are unable to feed our people using our own products as our manufacturing has slowed down wrto growth of the population. This probably because political class hardly cares about the country instead they are busy filling their own coffins. This is proved when recently central government put a ban on onion export as prices in country are rising because of rains in Maharashtra's onion producing region, but coalition partner disagreed with center's decision citing that it would destroy India as competitive agro exporter in world(Pathetic logic as native citizen has first right on country's resources and farm produce), so when we have such species of politicians present, It looks very difficult for Indian economy to become fundamentally strong and we can never think that our exports would surpass our imports in coming years, until government focuses on local manufacturing and rises import duty without thinking of their individual benefits before nation's.

A weak manufacturing economy an never be fundamentally strong economy and people should not live with notion that our economy is fundamentally strong.
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