The present economic scenario is full of uncertainties. Some of the issues to be addressed would mainly depend on the following points-
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Global financial institutions have tumbled, threatening to pull down global economy itself. |
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The first impact of this will be a severe credit crunch which we have already started seeing in both international and domestic markets. |
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Equity markets have nose dived globally. Indian markets have been no exception. |
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Commodity markets have started softening. Oil is now selling at half of $140. Metal markets have started falling internationally. Particularly, using scrap prices of steel have fallen by $300 per ton. |
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All these are signs of troubled times at best and overnight recession in the worst case. |
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Inflation rates, even in India, have started to fall on account of both high base effect as well as fall in commodity prices. |
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Savings rates could see a decline of 5-6% due to lower public savings, lower private corporate savings and lower household savings. The GDP growth rate is expected to be 7.3% or so. |
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Shortage of power and lack of infrastructure will continue to affect growth of Industry. |
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Reforms in the area of banking, insurance, pension funds, etc would be required. As our Prime Minister has said the global institutional frame work has to be revisited considering the new economic order. |