The drought of appropriate employment opportunities and rising incidences of unemployed educated graduates fail to inspire confidence about the future, says Kunal Kumar Kundu
The recent softening of inflation is purely a base effect at play.
The recent bailout of Romania by the International Monetary Fund puts the spotlight back on the East European block of countries and what it means for the Western European banking sector. If evidence is anything to go by, things are turning for the worse. In fact, if a block of countries could be termed 'sub-prime', Eastern Europe seems to qualify as the countries seem to have been battered and bruised big time by the ongoing global financial turmoil.
While the forecast was still lower than what we have been recording over the last few years, it instilled a false sense of comfort that India might still weather the storm better than many other countries.
For a capital-scarce country like India, it is criminal if the government fails to manage its own expenses.
There is a need for concerted effort with a proper understanding of the global dynamics and not standalone policies that can trigger protectionist instinct among countries.
The high growth rate over the last few years has been more cyclical, than structural, in nature. And continued supply side bottlenecks will necessarily mean that periods of high growth will trigger inflationary pressures.
The government can flight inflation by using monetary policy that aims to curtail demand through higher interest rates and lower liquidity.
Of course, we would still grow at 7-8 percent. We would still be smug in our achievement and say it is still better than most of the economies in the world. As for double-digit growth, let that remain only in paper.
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