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Rocket Science is not always the required solution!

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Indian market conditions of 2013 been one of the much-discussed issue these days. From newspapers- to web-to journals, all have some or other big bang reforms to suggest and talk about. We all are forgetting that Simplicity is a solution!

India today is not in its 1991 were there is need of some complicated theory. Our country can withstand the storm caused by Global and Domestic Economic Factors by mere “Simple Ideas.”

We can look into the matter with an easy and understandable approach:

– Recently, the inflows of uncertain capital has increased due to Swift Deprecation of rupee (fall in the value of Money) Reason being the untiring inflation from the past few years and High Current Account deficits $85 billion – Gross Domestic Production of nearly 4.5%.

– Then, there are two opinions One from our economist who feel these crisis are marked to be worse than the 1991 economic depression what India Faced in past and would need some big reforms to overcome.

While on the contrary the Indian Government is of the opinion that 2013 economic conditions are not that intense of 1991 and will not need any big reforms to be implemented for the growth to re gain momentum.

 India 1991

– Strong western Economies.

– Deepening process of Economic Globalization

– Low penetration of Global Financial flows in India.

– Less stake of developed economies into developing ones.

  India 2013

– Inward OECD economies

– Busy fixing self-domestic economy and polity.

– Western Capital Penetrated Significantly in India.

– Long – term stake of OECD economies in India.

From the above pointers we can come to an inference that the Global inflows play key important role, today these investments are deeply in grained and if the situation worsens then it will also impact these OECD economies by moving to every nook and corner of the world which will affect the overall world consumption pattern and factors of production. This wavering stability will gather recovery and pace once USA shows quick signs of recovery.

Coming to the depreciation of Money value various countries like – Brazil, South Africa, Turkey, Indonesia along with India, faced a 15-20% drop in their currency value. This is because U.S Federal reserves have withdrawn a good amount of liquidity from the global market place. Yet there is a ray of light for Indian economy to recovery smartly as the housing market in US is a prospect of Federal reserves, which is releasing its $40 billion per month support in order to mortgage bonds in span of coming one year. A full recovery of USA will only make rest economies healthy.

Considering the current situation India must be very care full that the cheap inflows are like a weapon, which will protect you as well at same time, can harm you! We need to use it shrewdly to boost our economy by bringing in fresh reforms.

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