While proposing to pull the United States out of a “national crisis, President Barack Obama pressed Congress to act urgently to approve a jobs package of tax cuts and government spending. Obama wants Congress to pass his “American Jobs Act” by the end of this year. But that may be hard to achieve with politicians already focusing on the presidential and congressional elections in November 2012. If Obama can push through his plan, it might provide a jolt to an economy that has stalled and give companies confidence that if they invest and hire there will be customers for their products and services.
Union Finance Minister Pranab Mukherjee said the information and technology (IT) industry might be affected due to the current economic crisis in the US, but cautioned that there was no need to press the panic button yet. It is too premature to say what the final shape of the downgrading of the US economy would be.
Domestic demand is the main strength of the Indian economy, which other advanced economies do not have. During the global slowdown in 2008, India managed 6.8% growth despite negative growth in exports for 11 consecutive months and nearly 60% of India’s export destinations were Japan, EU and USA. The fiscal crisis in the US and Europe could have some impact on exports, though it was yet to find out how much the Indian export industry has benefited from exporting to new locations in the past two years.
Read lot more in Rubber4U – 15th September 2011 issue
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