By Prof. Dr.
Khawaja Amjad Saeed
Feb 25 - Mar 10, 2002
On September 11, 2001, the two towers of the World
Trade Centre (WTC), New York were raised to ground. This incident is
attributed to zero level place. USA economy alongwith many countries
were badly affected. This piece looks at the impact on Indian Economy.
India has produced fiscal deficits for the last
several years. Every year announcement is made to reduce budget
deficit. During 2001-2002, budget deficit was estimated to be
restricted to 4.7%. Later it was revised to 5.8% but by the end of
January, 2002, it has been revised to 6.5%. It is, therefore, apparent
that there has been unfavorable impact of budget deficit on the Indian
Despite a vast economic base of India, her exports
never exceeded $ 50 billion. During 2001-2002, a target of 20%
increase in exports was fixed but it has now been revised to 0.6%.
Monsoon was expected to have healthy impact on
agriculture. However, in reality monsoon was less than satisfactory.
Consequently agricultural production is also registering declining
As against a projected increase of 5.8% in the
industrial output of mining and manufacturing sector, the revised
projection is 4.8%.
Moreover, IT, tourism and aviation sectors have
been adversely affected.
Business Confidence Index
Business Confidence Index for a period of three
months (October - December, 2001) has registered a drop of 11%.
There is a growing worsening perception of
investment climate in India. Consequently, there is a poor demand on
consumer durables. Major constraint identified is demand.
The largest fall in Business Confidence Index is in
Services Sector. Software exports have been affected by declining
Financial Services have been adversely affected by
the poor growth of other factors.
The above Indian scene is based on Research
conducted by the National Council of Applied Economic Research, New
Delhi (NCAR) and was extracted from the Times of India, New Delhi,
December 28, 2001.
*Member Governing Council, IFAC (1997-2000),
President, SAFA (1997), President, ICMAP (1997-2000) Dean: Executive
Programs, The Punjab College of Business Administration (PCBA),