Monday, September 17, 2012

will Indian Economic Reforms Hold?

The recent moves by the Indian government are considered very positive by those watching the country, but the question remains on whether or not Prime Minister Manmohan Singh has the character and strength to keep the proposed measures in place, after reneging on retail reforms earlier in the year.

This time around the government of India has said it will allow foreign supermarket chains to compete in retail markets, as well as open up the airline sector and broadcasting to foreign investment.

Also of significance is the announcement India will be selling stakes in four of the industries run by the state. It will also cut fuel subsidies.

Again, the question is whether or not the Indian government will hold its ground in the midst of fierce opposition from within the country.

India will never reach its potential until it does, and it has been dragging its feet far too long in order to get the country moving in a significant economic manner.

Until the government proves they'll stick with a plan, it won't do much to get the Indian economy going in any sustainable way.

The country also much attempt to do something about its high inflation, capital costs and high energy prices. Consequently, investment demand is weak both externally and internally as a result.

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