April 15th, 2009
When the world was reeling under recession, Tamil Nadu was saved by our leader Kalaignar!
Recession – What does it mean to us?
“Recession” is a panic word to the world. The past few months have witness many layoffs, in both the developed and developing nations across the globe. Today, I want to share my thoughts with our young people, about recession – how, India has fared under the dynamism of Shrimati Sonia Gandhi and the UPA lead-government under the leadership of Dr.Manmohan Singh, and how Chief Minister Kalaigner’s Tamil Nadu has taken on recession – and what must be done to overcome the downturn, prevent layoffs and emerge successful.
While there is no denying the global meltdown, in the Indian context we need to act wise and smart to overcome such situations. So what is recession? A recession is a decline in a country’s gross domestic product (GDP) growth for two or more consecutive quarters of a year. The current recession also experienced a slow down, right from mid 2008. What causes it? An economy which grows over a period of time tends to slow down as a part of the normal economic cycle. An economy typically expands for 6-10 years and hits recession for about six months to 2 years. But, as reported by the media, India as an emerging economy, has defied recession to a great extent because of sound administration and farsighted policies.
Indian and Tamil Nadu economy
Does recession have a different upturn to the Indian economy which has shown a robust and consistent growth trajectory in the last 3 years, despite the global slow down? Sure it does.
In the year 2008, we saw a record 9.2% of GDP and external commercial borrowing has slowed considerably, and foreign direct investment (FDI) has held up relatively well. The heartening news is that the foreign currency reserves remain adequate compared to the country’s gross financing requirement and imports. All of these measures point only to one thing – Strong leadership at the State and Centre – A leadership that has the vision to forecast global conditions, and safeguard the welfare of the people, at all times.
As a major constituent of the UPA government in the centre, union ministers from Tamil Nadu have played a key role in shaping these fiscal policy measures. Various industrial houses have set up their units throughout Tamil Nadu, thereby creating several thousands of direct and indirect job opportunities for our young people and have resulted in an overall growth in the neighboring areas. When the world was reeling under recession and layoffs, there were growing opportunities in India, especially in Tamil Nadu – thanks to the people-centric policies of our Chief Minister Kalaignar.
In the last 3 years, many MNCs have setup their operations, in Tamil Nadu, resulting in increased employment and production. Automobile industries, cellular companies, IT organizations and many sunrise industries have shown a healthy uptrend, here. An increasing number of IT parks are being established in Chennai and in other major cities of Tamil Nadu. This has created ample international opportunities for all those young people trained for employment in the IT and ITES industries. Employment opportunities have also become manifold through the many SEZs established in various parts of Tamil Nadu.
As a progressive thought leader, Kalaignar has insulated the people of Tamil Nadu from the global meltdown by increased government spend on welfare measures and subsidized delivery of essential goods. Kalaignar, has always insisted on welfare schemes and food security measures that address the basic needs of the people of Tamil Nadu While we do not have a social security system in place, Kalaignar’s policies have ensured that a de facto social security system, in the form of subsidies and welfare schemes was always in place – Welfare schemes like, one kilo rice at Rs.1, medical insurance for Rs.1 Lakh, a monetary assistance for women’s marriage and for pregnant women, welfare scheme for the educated unemployed youth, pension for the old, a 7000 Crore loan waiver for farmers, interest waiver for the regular remitters, retail goods at subsidized prices are some of Kalignar’s achievements that have saved the people of Tamil Nadu from the global recession.
In the near future, I foresee India as an economic super power, which should enable us to implement a system that will provide quality health care and social security to our masses – our farmers, our laborers and our working classes, whose tireless efforts continue to build our nation.
In this context it was heartening to note that the International Monetary Fund (IMF) had highly commended India’s strong economic performance in recent years. This is a result of our sound macroeconomic policies and continued progress with structural reform. In fact, we are confronting current global economic and financial crisis from a position of strength. All the economic indicators and surveys reveal that we are likely to fair better than any other country in the world, in the next couple of years. But is it fair to assume that the global recession means nothing to us? My pragmatic answer would be a big NO.
The next steps
The global recession does mean something to us. It would be a blind folded statement and a state of denial to believe otherwise. However history shows us that the strongest nations have built their economy and infrastructure during recession and emerged super powers during the next upturn. This is the most opportune period for us to prepare ourselves for the long haul, in the following areas:
Agriculture: India lives in its villages, said Mahatma Gandhi. Agriculture is still the mainstay for our villagers. We will continue to focus on agriculture – a clear policy that was implemented right from the day we came to power. When Kalaignar took his oath as Chief Minister, the very first order that he had signed, was the cooperative loan waiver for farmers – right at the dais. The DMK government offers subsidy for procurement of seeds, fertilizers, farm equipment, topping it with free power and support for almost all aspects of agriculture. We understand that an agriculturally self-reliant and food secure India, is fundamental to our success in the next decade.
Information Technology: The private sector, especially, the IT sector has been hit, as much of their revenue comes from exporting services to USA and the rest of the world. But the overall Indian exports to the United States account for just over 3% of GDP. India has a healthy trade surplus with the United States. While the Indian IT sector is not in a recessionary mode, there is a slow down. For all my friends in the IT sector – entrepreneurs, technocrats and employees alike – my suggestion would be to look at using our vast knowledge base and expertise that we have gained over the last two decades, experienced human resources to take on innovation and product development as against being service providers to the world. There is no denying the exponential growth that this sector had, until the global slow down happened. But looking at it positively, adversity has a way of making a futuristic statement to talented technocrats and entrepreneurs. We are still looking for that one technocrat and entrepreneur from Tamil Nadu who can showcase to the world that we can house our own home-grown IT transnational – the next Google, Apple, Microsoft, Sun or Cisco. Isn’t this something that needs your attention, my dear friends in IT?
With almost zero systemic hurdles in Tamil Nadu, under the leadership of Dr.Kalaignar, there is nothing that should stop the technocrat, come out with the one big idea – the one idea that can provide the evolutionary shift in the way we perceive our service delivery in this sector. I am eager to hear from all of you, your thoughts on making this possible. Please use the Comments section on my website to share your thoughts with me.
Manufacturing: Manufacturing industries provide plenty of job opportunities – both blue collar and white collar jobs. Our government continues to provide ample support to various small, medium and large manufacturing units, not just to set up facilities in Tamil Nadu, but also to churn out products that meet international quality and safety standards. If the recent reports on the Chinese toy manufacturing companies are anything to by, it is imperative that we focus on improved quality and safety standards. To be successful in the international arena, higher quality and better safety standards will be the key.
The Banking sector and the Consumer: While the western world is resorting to stage funded fiscal stimuli to manage the financial crisis as the only way to avoid a prolonged recession, India has stronger policies in place, to protect our banks and public savings. While most of the western world’s banking and financial giants bit the dust, all our nationalized banks, NBFCs and financial institutions serving a 1 billion population, came out clean – an awe inspiring fact for the rest of the world. India as a nation is marching strong with its steady GDP, improved production, greater capacity utilization, considerably higher consumer spend and greater employment in the public and government sector.
Chief Minister Kalaignar’s schemes, the dynamism of Shrimati Sonia Gandhi and the policies of the UPA-led government under the leadership of Dr.Manmohan Singh, have insulated India and Tamil Nadu from the impact of the global recession. But for the cooperation of all Indians and the people of Tamil Nadu, this would not have been possible. I believe that if our young people can come together and work harder, we have the power to overcome any global challenge. I visualize such a progressive state and country. And I have the faith that it will soon be a reality.
Entry Filed under: General