Indian Elections and Economy

We have seen a vibarent indian elections getting over.The Right Wing politics took over the left wing congress who was marred with Scams and inefficiency. The Economy of India is in Doldrums with current account deficits going over the roof and Ironaically the Stock markets as well . The Quesion now is what happens next..


Here is my take on this situation. I do not claim to be an expert on economy in India but my honest interpretation is that the Markets in India are illusive and dont tell real picture. The unemployment rate in India is 22% and for people below ages of 25 years it is 32%. In next 5 years the demographics of India is going to be 45% people below ages 30 and looking for work. 


Now let us look at the scenario for creation of Jobs. 45% of employed  population is still employed in farm related activities, 35% in public and private sector industry . 10% in services and another 10% in Govt and administration Jobs.

Now if we look at the growth of employed population it will grow by 25% in next 5 years . Let's see the best scenario forecasted growth for industry.

the Service industry will grow by 100% so the additional 10% will be covered by services.

The Govt will be still the same . I guess it will be less as we get a more right-winged Govt which will slash costs.

The farming is going to reduce by 20% due to efficiencies and lesser land available. so a decrease of 9%

So to cover these you need 80% growth in private and public sector Industry my best guess is it wont happen so you will have unemployment growing to  40% from current 22% which is  a disaster in social terms.

So unless we have 15% growth rate for companies both in top and bottomline .It is a big trouble ..

The stock market would go up for some time but eventually when there is Social Chaos it is bound to crash leaving the capital stuck in those countries.


More to come on subsequent blog..