In The Media ⁽⁴⁰⁰⁾

Among all the failures of the UPA govt on the economic front, the slowdown in infrastructure sector is the most disappointing.Read full articleOnly a few months ago, many in the media had been arguing that the emerging market economies (EMEs) had now acquired a growth momentum of their own and were immune to the booms and busts in the developed countries. Less than six months into the financial crisis that originated in the United States, the "decoupling" thesis is biting the dust. The crisis, which turned the ongoing economic slowdown in the United States into a full-blown recession, has been transmitted to the Asian Asian EMEs at lightening speed. Triggered as recently as September 2008, it has led to a spectacular spiralling down of the GDP in many Asian countries. And more integrated the country's economy into the US economy, the more severe the impact. In South Korea, the GDP has fallen a whopping 21% in the last quarter of 2008. The loss in Singapore has been 17%. Taiwan has seen its industrial output decline by a gigantic 32% in 2008.

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A cheaper currency will help rebalance India’s massive trade deficit. Read full article Abstract: Since January, the Indian rupee has tumbled more than 9 percent, hitting a new all-time low of about 70 to the dollar in mid-August. The fall has caused much hand-wringing in the media and in policy circles, where observers lament the currency’s status as Asia’s worst performing, charge Prime Minister Narendra Modi with economic mismanagement, and fret about India’s ability to pay its debts. Calls for the government to do something—anything—to stop the rupee’s slide abound. But should India’s central bank, which has responsibility for managing the exchange rate, reverse the fall? My short answer is: no. The central bank has done an excellent job to date, and it should stay its course. Further, the weakening of the rupee will actually be a good thing for India.

In the longer run the country’s most potent weapon against terrorism is going to be rapid economic growth and prosperity. Read full article In the 2000s, India has been the victim of at least four major attacks by Pakistan-based terrorists: the Parliament attack in 2001, explosions on Mumbai trains in 2006, embassy bombing in Kabul in 2008 and the recent Mumbai carnage. What can India do to protect itself against future attacks? In broad terms, there are two options: stop the terror at source and tighten security at home. Let us carefully examine each of these options. There are three immediate avenues to tackling the terror at source. First, India could go on a limited war with Pakistan. While this option may help India avenge the attacks it has suffered, it is unlikely to persuade Pakistan to dismantle the terrorist outfits. On the contrary, it is likely to increase public sympathy for the outfits, make future recruitment of terrorists easier and give Pakistani army an easy exit from fighting the Taliban alongside the US army.

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