Nagpur: Dr. V. Aditya Srinivas, Chief Operating Officer and Chief Economist from the BSE Brokers Forum delivered a talk on “Indian Economy in Bright Spot – in Global Gloom,” at a meeting organised by the Economic and Finance Forum of Vidarbha Industries Association.
Dr. Srinivas explained how the USA Crisis, Eurozone crisis and the Chinese crisis and its impact on the world economy and the Indian economy. High Debt to GDP ratio which is the root cause of the entire world economy and debt laden economies are causing the jitters to the world economy and stock markets. In fact in 2016 January the FII have sold shares worth Rs.9,900 crore and thus the Indian markets have come down drastically. The entire Indian stock markets are controlled by the FII which are having holding of $ 328 billion of investment.
In the current scenario it is fortunate that the oil prices are at all time low otherwise with the import of oil with rupee touching all time low at 68 and with oil at 100 $ the Indian economy would have collapsed. There are various economic and non economic theories in the fall of the crude oil prices.
One of the theory is that USA is developing shale gas technology and so OPEC has deliberately brought the oil prices down. The second theory says that IS organization I selling oil in the black market which is putting pressure on the oil and third factor is that globally there is slowdown and so the prices have come down.
US (23%) together with Europe (20 %) , China (9.3%) and Japan 8.7%. contributing to the 61% of world GDP. India currently contributes only 2.4% in the world GDP. Except US economy other countries are not performing well.
The reforms initiated by the Indian Government have not seen the reality at the gross root level. It is unfortunate and world see with great surprise that the Govt with clear cut mandate is helpless to implement any economic reform may be it GST, land reform etc. Further more is to be done to ease of doing business in India.
He said that cost of capital is very high in India. Many times it is seen that that despite RBI’s initiative to reduce the cost by rate cut, , the benefits are not passed by the bankers. He also express concern over the rising NPA and banks. Despite all these the Indian economy has many unique features like young working population, good domestic demand and higher saving rate. Indian economy is poised with unique growth features and has huge potential to grow. The resilient feature in the economy was evident from the fact that world economy grew at 1 to 2 % GDP during Global Financial crisis while Indian Economy was able to make growth of 6.3 % GDP growth.
Atul Pande, President–VIA welcome the guest speaker. In his opening remark mentioned about the depressed economic situation currently prevailing in the country and affecting the business confidence. Cheap imports are invading the Indian market and thus killing the Indian industries. Govt has to make the industry more competitive to face the global challenge.
Omprakash Bagdia, Chairman-VIA Economic & Finance Forum in his introductory remarks said that Dr Srinivas, COO and Chief Economist of the BSE Brokers Forum, is an important forums make many suggestions to Government of India on economic issues. His experience shall help us to understand the key economic issues facing the country and the way forward.
The meeting was attended by members from industry fraternity, budding entrepreneurs, and management students. Those who are prominently present are Girdhari Mantri, Chairman of Knowledge Forum, M G Jawanjar, Naresh Jakhotia.
Megha Jaiswal introduced the speaker. Vote of thanks was proposed by Arun Bafna, Coordinator–VIA Economic & Finance Forum.