India’s growing pains: What’s behind the economic slowdown?

India’s growing pains: What’s behind the economic slowdown?
India’s growing pains: What’s behind the economic slowdown?
Stephen Carroll welcome to essential business briefing coming up. India’S economic growth hits the brakes where I’m asking what’s gone wrong and we speak to one overseas investor who says there are plenty of reasons to be optimistic about India that just a few months ago it was the world’s fastest growing major economy, turn audio to 5 % there are many factors contributing to this trend will delve into some of them in just a moment, was first, this report on the effects of India, slowing economy for my correspondence manufacturers, but in recent months, until Vegas in this Factory West Bypass so manufactured most of The machines have come to a standstill, just fly slow down. You can imagine the amount of job losses. You can imagine the trickle-down effect on the economy on the consumption over 85 % of all currency in circulation to combat money laundering for an economy that is still heavily dependent on cash transactions amounted 23 to 38 %. Demand has been very badly hit. Recently. The Indian government went through an unprecedented 22 billion euros from the country Central Bank to revitalize the economy. India is growing at its slowest Pace. In 6 years, from April to June, GDP, expanded just 5 % compared to 8 % in the same period a year ago, and I’m F forecast for 2019 as a whole has been cut to 7 %. Much of India’s labor market is in making it hard to verify unemployment data suggests it’s at its highest level. In decades, one thing tank says: 11 million jobs were cut last year alone, part by consumer spending, which is now slowing private consumption, grew at an annual rate of 53.1 % from April to June, compared to 7 % the previous quarter in rural areas sale. This household Staples, like flour, salt in cleaning Legends of country demand for oil, is the lowest in its 5 years. Touring output grew 12 % a year ago. It’S all that stagnant in 2019 and expansion in the agricultural sector has fallen from 5 to 4 government spending. Meanwhile is on the rise and has been one of the main contributors to growth this year. That’S just one of the efforts to reverse the slump. India Central Bank has cut interest rate four times this year and injected nearly 10 billion dollars. The banking system, while tenant state-owned banks, will be merged into 4 to boost lending tax breaks for startups and car purchases are also on the horizon, slumped by 41 % in August and, as we’ve been hearing at the key sector for employment in the country, I’ve been Speaking to Executives at the Frankfurt Motor Show for their view of the future of the Indian Marcos, India, we’ve seen actually the beginning of the year at developing quite strongly, but over discussions on the, for example, a text changes the market has slowed down in the past Couple of months, so that’s the reason within that’s. A BMW actually is defending a strong second position: India production vehicles and very very small one for premium cars on. In that context, in the premium sector, we still secretly would like to hear more about the business environment in India on joined by alpesh Patel in India Focus private Equity Funds. Presidium Partners. News also advised him unload their is the British prime minister on building business links with India. Thank you very much for joining us when you hear these things like a flodyne in the Indian economy, because these things go through Cycles. When we’ve been involved with the Indian market for over 20 years now, the things which one Cindy has always disappointed, and I don’t want to sound pessimistic because, like you said, we focus on investing disappointed people of always had aspirations of 10 % growth that such a Large economy, that’s to statistics which soda for me highlight the disappointment, but, like I said, I don’t want that. There’S two statistics Festival in 2018: China added in terms of growth to its economy 20 times as much in dollar terms, as indicated so engrossed times 20 times. The second is a little bit pessimistic is that India to grow at 7 % per annum, which would be considered take 53 years for it to have the same GDP per capita as frogs. All the United Kingdom today in dollar terms, 53 years at 7 % per annum to get the same GDP per capita, pointing economic numbers for India, but overall in terms of investment opportunities, will remain optimistic. Narendra Modi, you know with Alexis the pro-business Prime Minister. The first time around he promised to it, put in place to change it, to make it easier to do business. Is that works? Do you think on the ground when factors which is being a c train is the lack of corruption? Now, I’m not saying it was something which was noticeable before, because the nature of these things is that you often don’t come across it face-to-face it’s for the down the chain. You just don’t know why you want to contract at the last minute, you’re about to invest in something, and somebody pulls out a second set of books, something like that that we don’t see anymore the many structural changes which need to be implemented this many more. They take in order to get an increase in availability of credit, which would then be smoking spending which is West structural and those things take a heck of a lot of time. You can simply solve it by just spending more because these things have been in the in the structure of the need to call to meet for decades and that’s something which obviously 4in to solve, not least fix anything about. Even just the demonetization. That’S a major change, but it takes a long long time before the benefits of it might feed in to the economy. What sort of reforms are needed for India to attract more and more people like 420? Is the country individuals? We can find enough opportunities in the country of that side. We can find out 10 to 20 deals in a year. We need some sort of things on several of the key things with toys come to mind, Festival, lower cost of capital. Domestic Beasts of the companies reinvesting can borrow at a cheaper rate. That would mean a greater supply of capital of Maine play the savings rate. It would mean for the confidence in the economy at me, more Banks being Fria to lend more. Now that’s going to be a concern for all economies because of what happened during the credit crunch. They don’t necessarily want to be lending more freedom, easy and credit controls. I would also list regulatory changes, which would mean regulations reduce property in an economy such as India, regulations are often, and for very good reason. Cuz it would otherwise lead to is an abuse of the weakest in society said, I can say to you as a business person in my own self-interest, hey, that’s just wave a wand to remove these things and I’ll do very well. Well, actually, they’ll be all this whole abuse the system I’m take advantage of the weakness in society, so we appreciate these things have to happen slowly and carefully, and that’s what the government would say and it’s wrong to measure it purely in economic numbers. We go to measure it also in terms of social welfare and and what time on the ground in terms of protecting the social and economic rights of those people, like I said the weakest in society, of which only see India, by its very Nature, has a disproportionately Larger number than a frontal UK would have most definitely adding in terms of grass Walt. I said it was 120 lost, yet at least it’s PC has been expanding in India, which gives employment to younger people living in smaller places. I could drop the state I’m from I’m from in the state and the cities on the job creation that do to that and play the younger people. Cuz. It’S got a very young population. I see a lot to be optimistic about and that that’s rubbing in the right direction for that when I look at the budget, it’s nothing to worry about in terms of debt-to-gdp, you look at inflation as a hold of Coast, reproduce. Look. I don’t have enough money to save after I put food on the table, but I’m talking about as a broad-brush approach. There’S a heck of a lot. Okay, good notes finish on. Thank you very much I’ll pass portal at find your opinion part it’s running on the program new Stephen until next time.
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Just a few months ago, it was the world’s fastest-growing major economy. Now India’s economic growth has hit the brakes. So what’s gone wrong? The country’s car industry has taken a battering from the downturn – we hear from carmakers if there’s any recovery in sight. Plus we find out how overseas investors view Indian policies designed to bring in their cash.

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