Talk on Indian Economy in Bright Spot – in Global Gloom held at VIA

On 27 January, 2016 at VIA

Forum: Economy & Finance Forum

Speaker: Dr.V Aditya Srinivas,

“High Debt to GDP is the root cause of  world economic crisis” Dr. V Aditya Shrinivas at VIA

 

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.

 

Mr 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.

 

Mr. 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 Mr Girdhari Mantri, Chairman of Knowledge Forum, Mr M G Jawanjar, Mr Naresh Jakhotia.

 

Ms Megha Jaiswal introduced the speaker. Vote of thanks was proposed by Mr Arun Bafna, Coordinator–VIA Economic & Finance Forum.

 

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