Millennium Post

‘World economy very ill, India not doing that bad’

Union Commerce & Industry Minister Anand Sharma pointed out on Thursday that even the best possible economic management by state actors and most efficient business practices by the corporate sector cannot overcome the negative effects of a world in serious economic decline.

Addressing the 47th annual convocation of Indian Institute of Foreign Trade (IIFT) in New Delhi, he referred to the World Economic Update released by the International Monetary Fund, which pegged the rate of growth of world economic output at 3.9 per cent in 2011 and 3.2 per cent in 2012, down from 5.1 per cent in 2010.

The minister noted that even though the Indian economy is growing at rates far lower than what it used to a few years ago, the country’s performance is still far better than both the world economy in general and the advanced Western economies in particular.

India, whose growth rate in financial year 2012-13, which ends on 31 March, is expected to touch a decade-low rate of around 5 per cent, is still the second fastest expanding country in the world, next only to China.

Sharma also expressed grave concern about the country’s astronomical current account deficit (CAD), which has reached record highs this fiscal. He attributed this to three factors — slack exports, rising imports and the persistence of high volumes of gold imports.

India’s performance in the exports front has suffered badly to the prevalent weak growth rates among the country’s main trading partners. The USA, which is barely beginning to emerge from the economic crisis that started in 2008, and the European Union, which is mired in a serious debt crisis involving several of its 27 member countries, together account for as much 30 per cent of India’s total exports.

India’s aggregate import bill continues to expand, largely due to the inelastic nature of the country’s crude oil and natural gas imports.

Finally, although the volume of gold imports has declined a bit due to the conscious policy measures taken by the government, yellow metal inflows into the country still remain the highest in the world.

Indian Institute of Foreign Trade, which has grown in stature to become one of the world top management institutes, has signed 30 memorandums of understanding (MoUs) with the cream of universities and business schools across the globe.

This academic year, it has signed two historic memorandums of understanding — one with the University of International Business and Economics in Beijing and the other with the Singapore Management University — for joint academic activities and exchange programmes.

IIFT has also sent 26 of its students abroad under the student exchange programme of studies.
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