Many companies are experiencing a very sharp downturn in terms of sales and foreign investors are in a cascade of pulling their money out of the Indian stock market because they have already lost their confidence with the Indian economy – the risk of an indian rupee crash is rising. The agricultural production is also down, the unemployment numbers are at all-time highs, and restricted bank lending and closure of many institutions are signs that an economic collapse has begun biting the Indian economy. The financial sector in India has made many errors and the whole Indian financial system is in big trouble if the situation is not remedied on time.
India has a very good automobile industry but it has also succumbed to the prevailing economic conditions and it has taken a serious hit because now sales have dropped by about 40 percent. The automobile industry is a key source of employment for many Indians this decline means some of the people might lose their jobs. India is about to face the worst economic crisis since independence. Lately, the crude oil price has fallen and this is a time to make windfall gains by the developing countries. In Asia and Africa, we have seen many nations experience spectacular economic boom but at the same time, things are falling apart in India and the country is heading towards an economic collapse.
For many years, the Indian financial sector has been dominated by state-run banks which have been very ineffective in managing the Indian financial situation. The economy is poorly governed on top of connections between the leaders and the powerful Indian tycoons is what contributed to the credit crunch. This meant that the borrowers had to look for alternative sources of money. Because of this need, many “shadow banks” popped up and these unregulated lenders ceded loans that were very risky especially in the real estate industry. Because of this, we have witnessed Punjab and the Maharashtra cooperative banks being seized by authorities and the top executives being arrested. Because of these issues, many account holders have been restricted from accessing their savings accounts and this leads to panic as the customers demanded to have their money back. Prepare for the Indian rupee crash! The rumors of bank closure spread fast like wildfire resulting in bank runs as everyone scrambled to make their withdrawals. The run of the PMC bank happened a short time after the collapse of another lending institution.
Since the 2006 currency crackdown, India has been screwed and with larger wallets sucking the government, things will never be good for the Indian economy and what is happening now might be just a little glimpse of the economic collapse that is headed towards India.
Messing up with the Indian rupee basically damaged the whole economy. This blatant act by the government damaged the trust that people had with the currency and if the current slowdown continues, we might see a big financial collapse hit India.
With low GDP growth, a disorganized financial system, large numbers of semi-educated citizens and corruption, the Indian economy is at a blink of collapse. This economic collapse might result to even lower employment. The government does not seem to have any emergency plan to pull the country out of this condition in the near future. Currently, the large portion of wealth is only owned by the top 1 percent of the population while the majority of the Indian population is poor and the poverty situation is getting worse every day. Unemployment and hunger is increasing every day with little hope that things will change. The government is controlled by corrupt politicians and influential business people. With the incompetent and corrupt government system making the decisions, the economic situation will only get worse. Probably, the public will begin riots and protests against the administration in the near future. Unless things change at this stage, India is already done. The economy is dead and any time, the bubble will burst and India will find itself in a historic economic collapse.