Is the great Indian economic growth losing steam?
I have to admit that many are convinced that India’s economic growth will be lower than the 9.4 percent achieved in 2006-07. Others say it may be less than 8 percent. And nobody is willing to put their stakes on 9.5 or 10 percent. Add to that surging interest rates, an appreciating rupee and poor infrastructure.

So what's with the Indian economy? Is this high-growth, high-inflation phase a matter of worry and panic? Or is it just a correction phase?

Without doubt high interest rates are impacting capitalisation. To remain competitive, the rates have to be lowered. Moreover the delays in infrastructure-related projects have also hit the Small and Medium Enterprises (SMEs). If this continues, it will also impact larger enterprises too. And the argument is simple: SME deals whose viability had been calculated at lower interest rates months back have suddenly become nonviable. And against the backdrop of certain rigid monetary measures taken by the Reserve Bank of India (RBI) I see the growth of Indian industry taking a downward trip.

Under such circumstances the agricultural sector can emerge as the only saving grace. Experts see the sector growing to three percent from the current 2.7 percent. However, even in the agricultural sector if there is no restructuring of the domestic pricing policy of various crops, its growth can cut a sorry figure.

However, the situation has not gone out of our hands yet, and this is not the end of the Great Indian Dream. No doubt, the situation is worrying, but this does not signal the end of the road for India's economic growth. We need to make certain amends in the policies, turn our focus to both infrastructure and equally to agricultural sector.

So is the Indian economy slowing down? I would rather say that the economy is showing signs of correction. Now, do we agree on this?

Monthly Economic & Commercial Report on Singapore for June 2007 giving latest updates on developments directly affecting India's foreign trade and investment. Read More...

The most important thing for the investors is that the government can provide a healthy economic environment. I think if the country is not well controlled in its economics and politics, no investor could make his fortune.