If you steal from one author, it is a plagiarism,
if you steal from many it is a research.
.............. Wilson Mizner.
if you steal from many it is a research.
.............. Wilson Mizner.
Tuesday, June 21, 2011
Indian IT industry concerned over global economic crisis
The resurgent Indian IT industry Monday expressed concern over the fragile global economy plunging into crisis again due to sovereign debt defaults in Europe, sluggish growth in the US and emerging economies overheating.
'The economic crisis is not just in India, but the world over. This is a period of concern. If the situation becomes worse, I don't think anybody can predict what will happen,' a top industry executive said here.
Though the Indian IT industry had not seen any impact of the crisis brewing, especially in Europe, Infosys chief executive S. Gopalakrishnan hoped that the lessons learnt from the 2008 global financial crisis would help in tackling the present crisis.
'I am hopeful that the coordinated efforts by the European Economic Forum and the IMF (International Monetary Fund) to address the debt-ridden crisis would get a right response as they did two years ago,' Gopalakrishnan said on the margins of an ICT function.
Admitting that the present crisis was a matter of concern for everybody, including the Indian IT industry, Gopalakrishnan said though economists projected that the post-2008 recovery would be a long drawn out downturn, the situation changed in a short time for better, especially for the developing countries.
'Hopefully, this time also, such concerted effort across nations will happen and we will be able to sustain this recovery. Though we (Indian IT industry) have not seen any impact yet, we don't know the future,' the IT honcho quipped.
Inflation haunts growth drivers
Inflation is proving to be a huge bugbear for both India and China — the two fastest growing economies in the world.
Data released on Tuesday showed that inflation had spurted to 9.06 per cent in India in May, which came on top of an 8.66 per cent jump in April.
The inflation number was higher than the consensus estimate of 8.74 per cent and immediately sparked worries about another round of rate increases on Thursday when the RBI meets to review its monetary policy. The Street is expecting a 25 basis point increase. The RBI has already forecast that inflation will ease to 6.5 per cent by March next year.
In China, inflation accelerated to 5.5 per cent in May, the fastest pace in almost three years, and industrial output grew more than the economists’ forecasts. China has raised interest rates four times since September, increased banks’ reserve requirements to a record and allowed the Yuan to gain about 1.6 per cent against the dollar this year.
Finance minister Pranab Mukherjee said appropriate steps would be taken to rein in inflation. Economists expect another rate hike by the RBI on Thursday.
Costlier fruits, petrol and manufactured goods were behind higher inflation in May compared with April.
“We would keep a close watch on developments, both domestic as well as international, in the coming months and make appropriate adjustments as we go along,” Mr. Finance minister said. He said inflation was actually lower compared with May 2010 when it was at 10.48 per cent.
Economists said the RBI could take a cue from Beijing to continue with its rate tightening policy. The RBI has raised key policy rates nine times since March 2010.
While the consistent rate hikes have affected investments and led to a fall in growth numbers, inflation still remains the RBI’s major focus.
In May, prices of manufactured products, which have a weight of around 65 per cent in the wholesale price index, went up 7.27 per cent year-on-year. Inflation in fuel and power, with a weight of almost 15 per cent, stood at 12.32 per cent during the period.
With rising core inflation, the focus will remain on inflation rather than on growth. Therefore, we expect the RBI to hike policy rates by 25 basis points on June 16 and another 25 basis points in the third quarter.
OECD view
The Paris-based think tank OECD said the Indian economy was likely to expand at over 8 per cent this fiscal and had the potential to witness double digit growth in the medium term, provided right policies were in place and demographic developments pushed savings rate higher.
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