LCACM

Is India a Benchmark Bet on the Global Economy?

India probably cannot be a benchmark for the Global Economy as its socio-economic makeup is markedly different from Europe, Africa or Middle-East. In India joint families and extended families are the norm, resulting in a family having several bread winners who pool their resources.. A job loss by one or two family members probably requires belt tightening but is not economically devastating as in the West where a family depends on one or two breadwinners. As a result the loss of consumer confidence due to the financial Meltdown is fairly low in rural India, compared to other economies. Also as the Indian laws do not allow companies to hire and fire to satisfy their whims, the job situation is not so dire. This has had the positive impact of improving consumer confidence and the resulting consumer demand. It is interesting that countries that follow a mixed economic model (India,China) are performing better than countries following either a purely socialistic or purely capitalistic ideology.

The Chinese Have Joined In, Now What About India?

During a crisis the Chinese government has the advantage that it has the necessary funds to invest in building it's infrastructure. As India has a democratic form of Government, it has used all it's available funds to purchase votes. India always boasts of having a democratic form of Government. This means that the elected representatives have to spend most of their time and energy in getting re-elected, and do not have time to think of development. So economic development in India will always be far less than what it is in China.

India's Approaching Age of Basic Materials

When free markets are crumbling in the US due to a lack of proper government oversight, it is strange that the author is advocating less deregulation in India.