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The Congress party is divided on economic policies. There is substantial opposition within the party to serious liberalisation of the economy. Moreover, paramount political power rests with the leader of the Congress party, Sonia Gandhi, who holds no cabinet position, while the government is led by an unelected prime minister, Manmohan Singh, who lacks a political base of his own."
"There is little sign of a revival in public support for the statist economic policies that were pursued until 1992," the report says.
Originally posted by ofhumandescent
reply to post by jjf3rd77
Maybe karma for the jobs your country took away from my country.
What goes around comes around.
Who are they borrowing the money from? This to me tells that some banks were pushing for the downgrade of the credit so they can increase their interest on the borrowing costs? Just a thought.
Any downgrade in the rating now will badly hit investor sentiment, increase overseas borrowing costs for companies and emerge as a risk for the Indian economy.
I have travelled overseas and I have never seen too many countries where the 'use and throw away' mentality exists. India is one of the conservative countries like many where people generally do not buy goods more often such as house hold appliances, clothes and/or automobiles. There are big spenders but mostly on services and luxuries which the percentage is low compared to the entire economy. Thus the 'spending economy' concept that was anticipated is not all there despite boasting the biggest middle class population.
Since the April outlook revision, a spate of economic data has drawn a gloomy picture. Growth in the January-March quarter slowed to a 9-year low of 5.3%, while food inflation hit double digits. Industrial growth remains sluggish and business confidence has taken a knock.
This is still a problem but even with Liberalisation, the conservative mindset of the people in general will always yield mediocre economic numbers despite the 1.2 billion population. It is simply not the same spending economy as envisioned by many western investors. Traditionally folks use to buy products that lasted for a very long time. Its the 'use and throw away' mentality that has led to the cheaper manufacturing cost of products with inferior quality (china) that keeps their manufacturing sector churning. The growth was staggering during the initial decade when the economic reforms and privatization was introduced to many sectors of India's economy. Most of the growth was dependent upon the Western economies though India's own economy has contributed to some major growth in the service sector. However it has to reach a stable point as many middle class people are still struggling to secure a job with a reasonable pay based on the cost of living. Service oriented industry such as hotels, resorts etc are always secure and do very well. There are big spenders on these sectors. Personal transportation has also reached a level where it has placed severe burden on the infrastructure. Fashion and Apparel are always in demand including Gold. Everything else is generally purchased for a lifetime unlike many western nations where the products are discarded as the cost of repair far outweighs the cost of replacement. This is a major problem since one can find dirt cheap labor in India to repair goods that most of us in the West would discard or consider non-repairable. Add to this, the GM crops and the trading of agricultural goods has driven the cost of food in general for the poor in the country which drives their labor up. However this was envisioned by several individuals before the entire liberalization process was being considered. Needless to say that India will survive as the people are used to the lifestyle before the economic boom. Its the folks in the west (atleast in the metropolitan areas) will have a difficulty adopting to a drastic change in lifestyle. This is perhaps one of the biggest reason on the 'survival' and 'doomsday preppers' mentality that has swept the media and forums in the west to awaken the 'self sufficiency' which existed/exists in many parts of the west decades ago.
It adds that divided leadership at the Centre may be the biggest hurdle to further economic liberalisation.....the report says."The Congress party is divided on economic policies. There is substantial opposition within the party to serious liberalisation of the economy.