Indian Economy Slowing . . .

With our markets turning the tide over the past few days not all confidence is back. With the Sensex putting a good show many wonder with glee of getting back into the market. Key economic data made available this week throws caution to the wind.

Industrial production for December '07 has fallen to 7.6% compared to 13.4% in December '06. Also the Core sector growth , comprising of crude oil, steel, cement, electricity, coal and refinery was 4% in Decemeber '07 as opposed to 9% in the corresponding month in the previous year. One might argue this is just a sign of the economy slowing in line with the global economy especially since our exports are hit hard due to a strong rupee. Our GDP too has been expected to grow at a rate of 8.7%

This does raise concerns over India's competitive relationship with China. Though China's GDP is slowing too; it is still growing at a rate faster than India's. To catch up or atleast maintain a healthy gap between India and China so as to not China get away with the cake we need to continuously clock growth rates higher than currently forecasted. As they say - We live in interesting times. Hope our FM comes up with his magic potion for the economy soon.