Will India go back to High Economic Growth in 2010?

Now, Indian ministers are very busy with the upcoming budget. The current fiscal year is going to finish on 31 March 2010 and the 2010-11 Fiscal year is going to start from 1 April. So, a bad year is coming to end and there is a sense of optimism that the next year will bring back the high economic growth. Like most countries, India also suffered from the global recession. Now, there is hope that 8% GDP growth may take place in the next fiscal year.

During 2005-2008 time, Indian economy saw fast growth and many foreign companies came here to take advantage of the growing market. So, I am hoping the same for the next one year. However, what is becoming a growing concern is inflation. Price of food items is increasing rapidly and the ordinary people are going to suffer.

Indian government is perhaps helpless against inflation because it is very difficult to control the market. Many factors work in a free market economy.

It is perhaps time that ordinary people start to think about the economy more seriously. Of course, they cannot become experts but they surely can think of decreasing consumptions of certain items that are in high demand. They surely can decide to waste less in wedding and other kind of parties. 

India observes lowest inflation in the last 33 years but rising oil and food price worry economists

India is now observing lower than 1% inflation for the twelfth straight week and it would enter the negative zone next week. Inflation dropped to its lowest since 1977-78 to 0.13% in the week ended on May 30^th. This has evoked fear of another sharp increase in inflation which has been fuelled by the rising price of crude oil in the international market and prices of food items inside the country. Yesterday, crude oil price rose to $72 per barrel in New York. In the last seventy five trading days, prices of crude oil in the international market increased to $68 per barrel. In India, price of crude oil also increased to $68.66. Business Standard reports:

In a report called ‘India Macro Stance’, Goldman said that inflationary pressures were sequentially building up. Recent data on both the Wholesale Price Index and the Consumer Price Index showed a sequential bottoming out between February and April. Latest readings of price indices were showing a bottoming out of inflation, it said.

Along with rising crude oil prices, rising price of food might pose a threat the overall economic growth of the country. Prices of wheat, rice and sugar have been constantly rising for the last two months. In August 2008, Indian inflation rose 16 year high to 12.91% which created serious problem for common man as prices of daily necessities rose. However, Indian Prime Minister, Manmohan Singh said that stimulus package offered by the government will not add to inflation but to economic growth.

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Business Standard

The Economic Times