The BRIC Economies Should I Be Removed

Presented by – Mayank Piyush Ankit Akansha Subhra Sagar

ContentMeaning of BRICWorld expectationCrack in BRICPresent of IndiaFirst BRIC to fallCauses for down fall of IndiaConclusion

What did BRIC economy actually means ?In economics, BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs" or "the BRIC countries" or "the BRIC economies" or alternatively as the "Big Four".According to a paper published in 2005, Mexico and South Korea were the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developedworld has argued that, since the four BRIC countries are developing rapidly, by 2050 their combined economies could eclipse the combined economies of the current richest countries of the world. These four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population

World expectation from BRIC countries till 2050

The BRIC thesis recognizes that Brazil, Russia, India and China have changed their political systems to embrace global capitalism. Goldman Sachs predicts that China and India, respectively, will become the dominant global suppliers of manufactured goods and services, while Brazil and Russia will become similarly dominant as suppliers of raw materials. Of the four countries, Brazil remains the only polity that has the capacity to continue all elements, meaning manufacturing, services, and resource supplying simultaneously. Cooperation is thus hypothesized to be a logical next step among the BRICs because Brazil and Russia together form the logical commodity suppliers

Present Situation Of INDIA(I)

• Per Capita Income is 35414• India Has a debt of 1200 Crores• The GDP Of INDIA is Between 6-7% • In India Savings Rate is 33.7%• In India 22% of People are below Poverty

Line• Food Availability per person is 444 Grams• The Main Source of Income Of India is Tax

Will India Be The First BRIC Fallen Angel? Slowing GDP growth and political roadblocks to economic policymaking

could put India at risk of losing its investment-grade rating. Standard & Poor's Ratings Services revised its outlook on India's 'BBB-' long-term sovereign credit rating--which is one notch above speculative-grade--to negative from stable in April of this year because of lower GDP growth prospects and the risk of erosion in its external liquidity and fiscal flexibility. The negative outlook also reflects the risk that Indian authorities may be unable to react to economic shocks quickly and decisively enough to maintain its current creditworthiness. Economic growth has slowed in India in recent months, as it has in much of the world, and the country has suffered mild erosion in its economic profile, with widening trade and current-account deficits. Its central government's fiscal deficit exceeded official projections for the year ended March 31, 2012, reaching 5.9% of GDP. In addition, inflation remains stubbornly high despite the Reserve Bank of India's tightening policies in 2011

Cause for fall of India Business Confidence Has Taken A HitLocal business confidence in India has deteriorated for various reasons, including perceptions of "policy paralysis" within the central government. India was able to boost public and private investment in infrastructure in recent years, sustaining high GDP growth of around 8%-9% during the three years leading up to the recent global slowdown (in 2008). However, a perceived slowdown in government decision-making, failure to implement announced reforms, and growing bottlenecks in key sectors (including lack of reforms to archaic land acquisition laws that hinder investment) has undermined business confidence. And infrastructure problems, combined with growing shortfalls in the production of coal and other fuels, have dampened investment prospects. Recent setbacks in economic policy have also hurt investor sentiment. Strong opposition from within the Congress party-led ruling coalition, as well as from opposition parties, recently forced the government to reverse its decision

Economic Policy At A Turning Point?These developments raise larger questions: Are the recent years of rapid economic growth over? India enjoyed GDP growth averaging 8.7% during 2004-2008 and 7.8% during 2009-2011. Will India return to a lower level of trend growth over the next three to five years, or can it recover to levels close to its impressive growth rates of recent years Moreover, is there a risk that India will go backwards in its economic policies and undo some of the progress it had made to liberalize its economy since the early 1990s? The government could react to lower GDP growth and greater vulnerability to economic shocks by tightening fiscal policy and liberalizing the economy. Or, it could potentially roll back some of the policies that had opened the economy and created a economicgreater role for market forces and private investment. Indian officials have consistently stated that while economic reform may be slow because of the political realities of a largely poor, diverse, and democratic country, it could only go forward. But is there a risk that

Leadership At Center is Be The Biggest Hurdle

The crux of the current political problem for economic liberalization is, in our view, the nature of leadership within the central government, not obstreperous allies or an unhelpful opposition. The Congress party is divided on economic policies. There is substantial opposition within the party to any serious liberalization of the economy. Moreover, paramount political power rests with the leader of the Congress party, Sonia Gandhi, who holds no Cabinet position, while the government is led by an unelected prime minister, Manmohan Singh, who lacks a political base of his own. Manmohan Singh did not run for office in 2009 and, according to many politicalanalysts, appears to have less influence within the Cabinet than previous prime ministers. In fact, the Cabinet is appointed largely by Sonia Gandhi and leaders of the allied parties, who choose their own candidates for the Cabinet posts allocated to them within the coalition. Hence, the prime minister often appears to have limited ability

conclusion