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4
PROPHECY OF DOOM
The repercussions of the financial crisis of 2008 can be felt even today. Despite the revival in growth due to the huge bailouts by
western banks, fiscal stimulus and easy monetary policies, the threat of economic imbalances, debt defaults by countries and
burgeoning inflation persist. The financial mayhem, evident from the growing debt numbers, coupled with slow growth, is affecting
large economies like the US and Europe. The irony, however, is that the economies that were actually trendsetters are now being
looked at rather suspiciously.
The recent report on the outlook for the world economy by the IMF is testimony to these issues. In its report, the IMF has lowered
its forecast for world growth and also mentioned the various reasons that could play spoilsport. According to the chief economist at
the IMF, the world economy has entered into a “dangerous new phase”.
Since the IMF is looked upon by nations around the world due to the role it plays in fostering global monetary cooperation, securing
financial stability, facilitating international trade, promoting employment and sustainable economic growth and reducing poverty
around the world, this report by the organization is very significant. We have tried to decipher this report in our cover story.
In this issue, we have also shed light on the recent rate hike announced by the RBI with the aim to control rising inflation and other
issues that continue to be impediments to economic growth of India.
There is also an interesting article on how Gujarat, also known as the ‘land of the legends’, has attracted investments not only from
within the county but also from international investors on the back of factors like strategic location, business-friendly policies,
robust infrastructure, superior manpower and abundant natural resources, to name a few. Through the Vibrant Gujarat Summit, the
state government has managed to garner investments from all over the world and facilitate expansion of local companies overseas.
Further, focused initiatives have helped Gujarat achieve tremendous growth, leaving behind all the other states in the country as far
as development is concerned.
Sectorally speaking, there are articles on banking, automobile and coal industries, among others. The piece on the banking sector
elaborates on the cautious approach undertaken by the RBI in doling out new banking licenses. As far as the auto industry goes,
companies are going all out to woo customers during the festive season to revive sales. And despite the immense opportunities
offered by the coal sector, several challenges still weigh heavily on the industry.
Apart from these, there is an article on the investor-friendly initiative undertaken by the market regulator, the Securities and
Exchange Board of India (SEBI). It recently proposed a concept note on regulating investment advisors. This concept paper is also
aimed at clarifying the role of the middlemen involved in the process, thus helping investors make the right investment decisionS.
Beyond Market 10th Oct ’11
Tushita Nigam
Editor
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