You are here

Economy

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in book_prev() (line 775 of /home/openspacedotin/openspace.org.in/modules/book/book.module).

The economy
India's economy continued on its low trajectory. The bravado of 10% growth is replaced with a more sober 5%. India's economy grew by 5% in the 2012-13 financial year, the slowest pace for a decade. The World Bank India Development Update) expects real GDP to expand by 4.7% (at factor cost) in fiscal year 2014 before accelerating to 6.2% in FY2015. The International Monetary Fund (IMF), in its World Economic Outlook, projected a growth rate of 3.75% for India in 2013-14, and 5.1% in 2014-15. You can read more here.

This is at a time when there is high inflation (over 6.4% in September). Core inflation remains low, though that of food and household necessities remains high. The inflation situation now resembles what India experienced in early 2010, when accelerating food prices combined with rapidly falling core inflation. The September price data showed that food prices have been rapidly rising since May. Food inflation is now at its highest level since July 2010. The main reason: vegetable prices, which may have shot up because heavy rains have hurt production as well as dislocated supply chains. Meanwhile, core, or non-food, non-fuel manufacturing inflation, has been falling because weak demand has hurt the pricing power of companies. You can read more here.

The public sector banks have silently written off over 1 lakh crore (Rs 1 trillion)-95% of it to large corporations--in the past 13 years according to the Reserve Bank deputy governor KC Chakrabarty even as India Ratings & Research estimates that Rs 2 trillion worth of bank loans for India's top 100 corporate houses are coming up for refinancing--about half of it potential default. Read more here.

... and India was ranked the fifth largest exporter of black money between 2002-2011 with over 343 billion sent abroad, and it was placed third when nearly USD 85 billion was exported within a year in 2011 according to a report Illicit Financial Flows from Developing Countries, 2002-2011 by Global Financial Integrity (GFI), a Washington-based research and advocacy organisation.