I have always been a strong supporter of Globalization , as my formative years were spent in seeing P.V Narasasimha Rao and FM at that time ,Manmohan Singh's policies for new India. Their policies got us rich dividends and India opened up to the world market. This was also a time when we started identifying ourselves with the US more than with Russia as a global partner. And over the period of 15 to 20 years we have marched progressively. We started to embrace the US mode of economic policies believing in its success.
Now we started seeing the dollar crisis for over an year now and its worsening day by day in US.Closure of major banks, filing of bankruptcy by leading companies, crashing stock exchange and a poor GDP. This according to the economists should not be seen as a global slowdown , rather its an american economic crisis which they inflicted upon the whole world. And How should the countries like India react? Their answer is very simple. There is not need to panic. India is a "Saving ecoomy". "Family" being a strong institution in India and since they do not rely upon stocks rather rely on safe mode of deposits, Indian micro-level (family level) economics is strong and so at the macro level (country level) also its stronger. And it calls for more interest in what is called a Swadeshi mode of economics.That is to increase consumption of products in India itself reducing the country's dependence upon exports. This will protect and insulate India from any global slowdowns. And according to IMF growth rate of India is going to be the highest in the world next year second only to China. Even in China "Family" as a entity is very strong unlike US. So there is more providence and less dependence on the Govt ( to request bail out in emergency)
Acc. to leading economist M.R Venakatesh, the Swadeshi idea is all about balancing past excessive dependence on external demand, urban-based mass manufacturing, and unproductive asset-building on one hand; with structural development in domestic demand, traditional sectors (e.g., agriculture, SMEs, and rural households) and entrepreneurs, and improvement in the pricing power of Swadeshi goods and services on the other. So we can understand that, India should move along in its path of Globalization with caution and rely more on its domestic consumption of products and services, rather than believing that export can only drive economy.Infact export-led growth has reinforced the dependency of developing countries on the developed world, thus becoming vulnerable to slowdowns in the latter's markets . Infact we need to promote development by relying on the expansion of domestic demand, take the expansion of domestic demand, especially consumption, as a major driving force, and transform economic growth from being driven by investment and export to being driven by consumption, investment, domestic and foreign demand combined in a balanced manner.
Thank you all. See you in my next post.
Sivasundar
Now we started seeing the dollar crisis for over an year now and its worsening day by day in US.Closure of major banks, filing of bankruptcy by leading companies, crashing stock exchange and a poor GDP. This according to the economists should not be seen as a global slowdown , rather its an american economic crisis which they inflicted upon the whole world. And How should the countries like India react? Their answer is very simple. There is not need to panic. India is a "Saving ecoomy". "Family" being a strong institution in India and since they do not rely upon stocks rather rely on safe mode of deposits, Indian micro-level (family level) economics is strong and so at the macro level (country level) also its stronger. And it calls for more interest in what is called a Swadeshi mode of economics.That is to increase consumption of products in India itself reducing the country's dependence upon exports. This will protect and insulate India from any global slowdowns. And according to IMF growth rate of India is going to be the highest in the world next year second only to China. Even in China "Family" as a entity is very strong unlike US. So there is more providence and less dependence on the Govt ( to request bail out in emergency)
Acc. to leading economist M.R Venakatesh, the Swadeshi idea is all about balancing past excessive dependence on external demand, urban-based mass manufacturing, and unproductive asset-building on one hand; with structural development in domestic demand, traditional sectors (e.g., agriculture, SMEs, and rural households) and entrepreneurs, and improvement in the pricing power of Swadeshi goods and services on the other. So we can understand that, India should move along in its path of Globalization with caution and rely more on its domestic consumption of products and services, rather than believing that export can only drive economy.Infact export-led growth has reinforced the dependency of developing countries on the developed world, thus becoming vulnerable to slowdowns in the latter's markets . Infact we need to promote development by relying on the expansion of domestic demand, take the expansion of domestic demand, especially consumption, as a major driving force, and transform economic growth from being driven by investment and export to being driven by consumption, investment, domestic and foreign demand combined in a balanced manner.
Thank you all. See you in my next post.
Sivasundar
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