Also today was the day the budget was released so I think it is apt that I post this essay of mine here for all of you.
As a responsible citizen of India how will I take my country through this financial slowdown?
The sub-prime mortgage crisis that originated in the US, soon consumed every country of the world, and has now become a Global Crisis of epic proportions that is second only to the Great Depression of 1929.
Most of the major economies in the world are in recession and this is taking its toll on people everywhere in the world. With reduced demand leading to reduced productivity, this in turn forces more and more people out of jobs as companies try to cut-down costs and maintain bottom lines.
India has escaped the brunt of the crisis thanks to its strong domestic economy and good financial regulations. We have managed to register 5-6% growth in the last year. This is down from 9% in the previous few years, but is still impressive considering the global crisis we are in.
However, certain sectors of our economy that are export-driven have suffered with reduced demand from abroad. This has resulted in job-losses for millions. Most of the people who have lost their jobs are daily wage-earners and usually the sole bread winners in their families. So the problem scales up when we take in to account all the dependents.
The stock market also lost nearly half its value. Many investors lost all their life’s savings in a matter of months.
Many analysts and experts say the worst of the crisis is over and things can only go up from here. But there are others that say that the world will take a long time to recover from the excesses that led to the crisis.
It is important that we focus on recovery and maintain strong economic growth rates to realize the dream of a poverty-free India. President Kalam once said that if India were able to maintain a growth rate of 10%, then by 2020, we could eradicate the scourge of poverty from this country. It is therefore imperative that we all take steps to re-energize the economy.
So, as a responsible citizen of India, how will I take my country through this financial slowdown?
Many analysts and experts believe that a recession/slow-down is a good time to restructure the economy and give it a better direction. I’m a believer of this school of thought and would like to look at this tough situation in a positive way.
It is widely accepted that one of the ways for an economy to handle recessions/slow-downs is to invest heavily in infrastructure. The deflationary effects of the slow-down means prices come down and therefore more work can be done for the same price.
India needs to develop its roads and transportation network. We need better schools and colleges. We need better power supply, better telecommunications, better ports and airports. Thus there is a tremendous opportunity to develop our infrastructure and bring it to world-class levels. This large-scale investment in the economy will drive up demand and will bring dividends over the long- term. Now as an individual I’m not really in a position to invest on my own in projects of the scale mentioned above. However, in a democracy, I am enabled to vote for the candidate that promises to do as mentioned above. I did exercise this power in the recently concluded general elections and I will continue to do so in all elections in the future. I also plan to be more involved and write to my local MLA, MP and Councilor demanding the implementation of the election promises and also try and give my own ideas and initiatives when I can.
I would also like to develop a savings habit for myself and encourage others to also do the same. Like the old saying goes- One must save for a rainy day. India has the highest savings-rate in the world. But being born in a generation with easy access to credit in the form of credit cards and personal loans, I feel those good old-fashioned money values are being lost. This easy accessibility to credit was the reason for the crisis in the US and I believe it is the duty of every responsible citizen to try and avoid it so that we don’t suffer a similar crisis here.
I also plan to become a prudent investor. I won’t be dealing in the stock market until I have understood the market dynamic. I want to have a complete knowledge base and I don’t want to be playing the market on speculations and gossip. People should return to their books and become thorough before they enter and play the markets. Market speculation and hype was another big reason that drove the real-estate bubble in the US. We must try and avoid the same here.
I have a long-term goal of becoming an entrepreneur. Entrepreneurship is the key to harnessing innovation and creating jobs. Job creation will hopefully be a positive off-shoot of my entrepreneurial venture. I will also encourage others around me to get in to business and try out new ideas and processes. In this way we can all play our part in developing Brand India and in harnessing this country’s tremendous potential.
These are the steps I intend taking to help my country through this financial crisis. I know that I am only an individual and there is very little that I can do to influence society and policy from where I am today. I also know that there is very little one can do when a crisis of a global scale is on us. I might be only one drop in the ocean, but each drop makes the ocean. People should learn and understand that, individually and collectively, we all have our roles to play in our society, economy and country. I’m sure if we all work on it we can pull through this crisis and make the India of our dreams a reality.