Both India and China have become quite significant on the global stage. Their significance cannot be denied or overlooked. Their economies are not similar but they have one thing in common that they are fast growing economies. During the recent decades, both the nations have, through their policies, managed to leash the rapidly and unscrupulously growing population, that questioned the economic prosperity of the nations. In contradiction to the notion that huge population becomes a bane to any nation, the two populous countries, have been putting sincere efforts, to convert the considerable part of the population into a skilled workforce.
Moreover, the manufacturing sector and the tertiary sector can find enough number of customers for their goods and commodities. This emasculates the internal market from the global fluctuations to some extent, especially during the global economic meltdown that retards the liquidity of the currency.
Indian market is strengthened and stabilized by three significant characteristic – the public, the private and the public-private partnership model ( the PPP model ).
The features of mixed economy and the PPP model have been quite compatible in the Indian context.
Indian market is safe-guarded with the government’s involvement. The timely intervention of the RBI controls the inflation balance to the best extent possible. The repo rate and the reverse repo-rate regulated by the RBI plays an important role in maintaining the value of rupee and its liquidity.
Before falling down to a shocking 4.7% , the economic growth rate of India had touched 9% growth rate. Similarly, China’s growth rate had touched 12% before the shocking decline owing to the global economic melt-down.
However, India remained immune to the global economic crisis of 2008 and its impact to a great extent.. Perhaps, the credit goes to the Indian commerce system that is characterized by the complex financial structure which is a blend of the fiscal policy of the RBI and the financial wing of the Central government. The role played by the RBI in regulating the Indian market and commerce, is appreciable. It is this feature, that subjects the wild enthusiasm of the private enterprises and the individuals, who do not hesitate taking risk with the global market’s fluctuations.
It would not be a panegyric to describe the RBI as a disciplinarian, monitor, guide and a regulator.
It would not be a panegyric to describe the RBI as a disciplinarian, monitor, guide and a regulator.
China incurred heavy losses owing to the 2008 global economic meltdown. It was the Secondary sector of China that received a heavy blow. A sharp decline in the liquidity of the currency and the diminishing purchasing power of the consumers of the United States and the other customer nations, had a paralyzing impact on most of the Chinese industries which relied on exports. Consequently, they came to a close.
The Westerners gave priority to the basic needs, instead of going for products meant for luxury.
On the other hand, India, which had made a mark in the service sector, received a staunch blow to the same. However, a major part of the market, being inter-dependent on the sub-markets within the Indian subcontinent, remained unbothered of the ongoing crisis in the global trade..Thanks to the large population of the country, that made the native producers and the native consumers inter-dependent on each other, without venturing into the global flood of economic meltdown.
India should, nevertheless, learn a lesson, that in future too, it should try to remain resistant and immune to the global economic plunge. With its huge population, it can certainly manage to become self-reliant by maintaining a super-structure of native system of commerce and trade that is reinforced with the RBI’s policy that is in most cases mature and guarded with foresight.
Optimistically, the 2008 impact should be considered a measuring instrument for that part of the national income which lacked consistency. The Chinese side, was left with huge bulks of manufactured products, ready to be exported, but in vain, owing to the withdrawal of the demand of the Western customers. Similar was the case with the Indian side, but with the service sector. The sudden decline in the demand of the outsourcing, left the countless skilled with lessened salary or with no employment. Both Chinese and the Indian side had pang, but in their own ways. The Chinese side had its huge capital struck in the form of investment that aimed at getting huge profits from the sale of the products. This had an enormous paralyzing impact on the country's economy. The impact was such that the Chinese government had to intervene in order to raise the liquidity of its currency. On the Indian side, huge number of professionals from the tertiary sector, who had high dreams, were left with no jobs. They were either compelled to manage with the marginal pay or had to shift to other areas where they could match their skills.
Optimistically, the 2008 impact should be considered a measuring instrument for that part of the national income which lacked consistency. The Chinese side, was left with huge bulks of manufactured products, ready to be exported, but in vain, owing to the withdrawal of the demand of the Western customers. Similar was the case with the Indian side, but with the service sector. The sudden decline in the demand of the outsourcing, left the countless skilled with lessened salary or with no employment. Both Chinese and the Indian side had pang, but in their own ways. The Chinese side had its huge capital struck in the form of investment that aimed at getting huge profits from the sale of the products. This had an enormous paralyzing impact on the country's economy. The impact was such that the Chinese government had to intervene in order to raise the liquidity of its currency. On the Indian side, huge number of professionals from the tertiary sector, who had high dreams, were left with no jobs. They were either compelled to manage with the marginal pay or had to shift to other areas where they could match their skills.
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