recession Essay

417 WordsJul 12, 20092 Pages
India headed for a major recession? Sunder Sen, Special Correspondent September 12, 2004 India like China may be headed for a major recession. The oil price, lack of agricultural infrastructure, excessive Government and consumer debt, failure of outsourcing economies like US, Europe and Japan can cause this to happen. Indian stock market is forming a cup and handle formation since year 2000 which is a classical bear market formation trend. This is coupled with excessive BPO bubble. The market after failing to pierce 6000 in third attempt may rush to test 3000 again and drop below 3000. If that happens India will enter a period of major recession or stagflation. The country faces major problems from failure in agricultural sector, international competition and communist pressures from the left in privatization. The private sector, which is heavily protected by the Government, may fail badly. Actually the Government run industries like Shipping Corporation of India is performing much better these days. Identifying deceleration in agriculture growth, poor infrastructure and lack of private investment as major impediments to the faster economic growth, the Planning Commission on Friday said that it would examine if the 10th plan target of 8.1 per cent growth was "feasible" while deciding on the course correction. A day after Prime Minister Manmohan Singh criticised the previous governments for "destroying" the performance of the economy, mainly by neglecting the vital agriculture sector, the commission said the mid-term appraisal would focus on "policy correctives" in critical areas in the context of government's NCMP priorities. Indicating that the 10th plan growth target may have to be scaled down, it warned against "populism" as it had contributed to "disappointing" performance in power sector. It criticised the previous NDA government for not giving

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