Both India and China have become quite significant on the global stage. Their significance cannot be overlooked. Their economies are not similar. They are fast growing economies.
Indian market is strengthened by three significant characteristic features – 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 with the Indian context.
Indian market is safe-guarded with the government’s involvement. The timely intervention of the RBI keeps the inflation balanced 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 possible. Perhaps, the credit goes to the Indian commerce system that characterized by the government’s significant role played in regulating the Indian market and commerce. 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 is a fact that China incurred heavy losses owing to the 2008 global economic meltdown. It was the Secondary sector of China that received a heavy blow. With the diminishing purchasing power of the consumers of the United States and with the decline in the liquidity of their currency, most of the Chinese industries which relied on exports, came to a close.
The Westerners gave priority to basic needs instead 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 that had come to a retardation to a considerable extent. 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 remain resistant and immune to the global impact. 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.
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