As the Indian economy enters the new fiscal year, the members of Entrepreneurs’ Organisation (EO) New Delhi chapter voted for the top events that moved the economy in 2012-13. A massive 57.8 percent correspondents agreed that raising the fuel prices was the single biggest shaker of the national economy in the last 4 quarters, another 21.7 percent considered the Congress-led UPA government’s decision to allow foreign direct investment (FDI) in retail sector to be the most influential event for the economy. In comparison, Standard & Poor’s downgrade of Indian economy and P. Chidambram’s return to Finance Ministry didn’t find many takers with only 12 and 7.6 percent voters voting them considering them the most important economic events of the year.
In a rapidly growing economy like India, the adverse effect of rising fuel prices is understandable. Expectedly, automobiles, transport, agriculture were the sectors that took the biggest blow. An economist at the National Council of Applied Economic Research in New Delhi, Anushree Sinha, told The Hindu that the impact is already apparent.
“The industrial sector has already been clocking deceleration in their growth. Industry is definitely not seeing the growth it should. Our manufacturing sector is not doing well which is a cause of concern,” said Sinha.
FDI in retail has also been a contentious subject, both inside and outside the parliament. While its effect on Indian retail will only be seen gradually, a large number of correspondents named it the most impactful event on India’s economic timeline.
However, the ratings cut by Standard and Poor, early last year, didn’t ruffle too many feathers with the voters. While S&P took a grave look at the situation, only 12 percent voters named the S&P cuts as the biggest shaker of economy during 2012. “The outlook revision reflects our view of at least a one-in-three likelihood of a downgrade if the external position continues to deteriorate, growth prospects diminish, or progress on fiscal reforms remains slow in a weakened political setting,” S&P had said, according to Reuters.
However, the general sentiment around the ruling United Progressive Alliance government has been weak, reflected in both the S&P note and the low number of voters who considered the return of P. Chidambram to the Finance Ministry a big change. Despite Chidambram’s reform-oriented and market friendly image, only around 8 percent voters termed his return to North Block the biggest economic event in fiscal year 2012.