A front page article, “Falling Economic Tide in India is Exposing its Chronic Troubles”, in the New York Times on September 4, 2013 calls attention not only to the recent economic slowdown in the world’s second largest country but also to what many analysts say are serious structural problems (Read the complete article here).
Here are some choice paragraphs from the article, followed by several other recent articles about India’s economic problems.
From the New York Times: India had seemed tantalizingly close to embarking on the same dash for economic growth that has lifted hundreds of millions of people out of poverty in China and across East Asia.
Its economy now stands in disarray, with the prospect of worse to come in the next few months.The economic decline has laid bare chronic problems, little remarked upon during the recent boom. An antiquated infrastructure, a sclerotic job market, exorbitant real estate costs and bloated state-owned enterprises never allowed manufacturing, especially manufacturing for export, to grow strong.
The rupee fell further and faster in August against the dollar than any of the world’s 77 other internationally traded currencies as investors in affluent countries took their money home for higher returns. It was down 20 percent since May, a period in which the stock market followed suit and fell almost 8 percent.
The real estate market is teetering after soaring to vertiginous heights over the last few years. Cranes on Mumbai’s skyline perch nearly immobilized as developers struggle for cash.
The price increases threaten to worsen consumer price inflation — already among the highest in Asia at an annual rate of almost 10 percent — and widen the country’s already large international trade deficit and government budget deficit.
The root of the problem is India’s failure to create a vibrant industrial base with the strength to export. As Western buyers scour Asia for alternatives to increasingly expensive Chinese factories, India and its enfeebled manufacturing sector are mostly ignored.
Other informative articles on India’s economic issues:
The Daily Star (Indian newspaper), September 5, 2013, “India’s Economy Continues Slowdown” (article here)
BBC Business News, August 30, 2013, “India’s GDP shows continuing slowdown” (article here)