Financial Meltdown or Terrorism – Which is a Greater Threat to the India Story? - Ranjit Shankar, Great Lakes Institute of Management, Class of 2009

India is undergoing a transition phase from once being a backward nation to today’s fastest growing economy. The current economic crisis has had its impact on India too. Job-cuts, industrial output slowdown, reduced consumption, lack of trust in money flow are some of the signs. Apart from this, the decreasing demand in the western world has had a huge impact on our exports, IT enabled services, M&A’s and on our domestic industry as well. We do have strong monetary policies in place which have largely isolated us from the recent meltdown. But the heat can still be felt. It’s so because we are no more a closed economy now. When we try to reap the benefits of trading with the world we have to be ready for such repercussions also. But what is more worrisome is the fact that we lack the basic infrastructure and proper fund channelizing processes which can help us stay firm in tough times also. Other developed nations do not face such issues and hence emerge even stronger after such recession.

The other major problem troubling the nation is Terrorism. It is no more an internal phenomenon. It has acquired a global scale. It’s not like a financial crisis which occurred due to negligence or wrong policies in place or which is cyclic in nature and can be combated. It is the product of wrong attitudes, extremism and lack of civil structure. Things have come to a state when terrorist attacks can occur anywhere without any prior indication and have severe repercussions on the society as it breaks our trust in the very pillars and fabric of society. We have started feeling unsafe in our homes also. This leads to an all-encompassing disturbance which is harmful for the entire society as such.

So I think that a crisis such as the current financial one can be fought far more easily because we know the causes and can come up with set procedures and remedies, but it’s difficult to ignore the growing threat of terrorism because it not only affects our regular business but also our self-belief and unity as a nation.

Mukul K Kejriwal
1st Year, M.Mgmt
SJMSOM IIT Bombay

In today’s global scenario where India is no longer a closed, insulated economy, the fruit comes at a price. Looking at the positive aspects, we have become a lot more competitive, have more opportunities and are moving towards a bright future ahead. But at a cost.

The whole world is going through a tough financial crisis and it is bound to have its impact on us also. And why not? After all, we transact with the whole world. So, going by the simple tenets of the supply chain concept everyone has to suffer. But yes, the impact could be more or less. Fortunately we have faced very limited impact from this global crisis, thanks largely to our conservative monetary and fiscal policies. But still the heat can be felt with slowdown in many sectors, job cuts, low productions, inflation and held-up projects. But then, there is a common will to meet the challenges of the times.

Now looking at the issue of terrorism, this is a fast-evolving global epidemic which is extending its roots in a dangerous manner. The problem with this is that in spite of knowing the effects it can have, it’s not possible for any one or two governments to combat it. The entire international community as such must get its will and acts together to rid the world of this insidious disease. Terrorism does not have a fixed trend as a financial crisis has; moreover there is no single, solid root cause behind it. It’s just the misguided thoughts and perspectives of a group of people which play havoc. And the mind in itself is more powerful in causing harm than the one who uses it.

Thus, looking at the Indian scenario, conservative and tight policies have helped her to shield herself to a significant extent from the ill effects of the global financial crisis. If it wishes to continue growing at a rapid pace, it’s very important to have strong internal security systems. There should be more strict laws against terrorist policies and conservative, strict relations with states who support them. Otherwise, the scourge of terrorism can be a great roadblock in India’s growth story.

Siddharth Mehta
1st Year, M.Mgmt
SJMSOM IIT Bombay

The India story is incredible! It is an account of the metamorphosis of an old culture as it adapts itself to the order of the new world. It has been a slow and painful process as India opened its doors to outsiders. The land of snake-charmers is now a knowledge hub. It is poised to be a dominant power, but for some threats. Financial meltdown and terrorism are some of these clear challenges.

First, let’s talk of financial meltdown. We see, hear and discuss it every day. The causes, effects and forecasts dominate the news-hungry media. No matter what the experts say about the future, all of them seem to agree upon the cause. They say that it is mainly an imported problem. To top that, India seems to have tackled it better than most other countries. The central banks and governments across the globe are working hard to bring liquidity back into the system. India will be in a prime position to take off from here and make bigger strides.

But even as analysts discussed the causes of and remedies for the economic crisis, The Taj Hotel of Mumbai and several other iconic landmarks in the city were targeted by mindless terrorist acts. Hundreds lost their lives. The whole world stood up and took notice. But, this was an external attack. Global terrorism is indeed a major concern today, not just for India but all other economies. However, what is often forgotten in the discussion of terrorism is that there are also innumerable armed incidents being carried out by "internal terrorists" every single day in the country that never even get noticed. An important distinction to be made here is that these terrorists (unlike the insurgents) are Indians like you and me. But they have been totally left out from the India story. So, they decided to write their own story - "The Red story". Using paramilitary forces like "Salwa Judum" would cause more pain in the long term. The real challenge lies in persuading these outcasts to join the India story. The promise of inclusive growth has to be delivered if we want to prevent our development being derailed by such internal terrorism.

The Financial meltdown is a global problem. India is just another victim. Internal terrorism is like a leach that sucks blood out of the body. Both the evils are bleeding India. But, I feel that internal terrorism can be better handled as most factors are internal. So, efforts should be concentrated on tackling internal terrorism on priority.

Amey Kambli 1st Year, M.Mgmt.
SJMSOM IIT Bombay

To answer this question, we need to carefully examine the current and potential impact of these issues. From a human angle, internal terrorism would definitely be the unanimous answer. Conversely, a financial analyst or investment banker might just think otherwise. After all, most of us look at and feel for issues which are closest to our lives. Let us examine these issues in detail for a logical, if not an absolute, answer. A terrorist activity involves, apart from others, many young minds who have been somehow dragged into this vicious cycle. For most of them, jihad has become the sole purpose of their existence and a sacrifice of their lives seems to be the only escape. If a blast kills hundred people, it actually destroys hundred families and puts another thousands of families into a state of shock. They thank God for being alive that day, but the fear and uncertainty about the future is a never ending gloom for them.

Financial meltdown is bad, as it effects the global financial system and impacts the careers of millions of talented brains. But this is something which can be revived through concerted efforts. However, rehabilitating the hardcore and brainwashed mind of a terrorist is difficult and bringing back the lost lives in terrorist activities is impossible.

Most of us express opinions and concern about such issues, but the need is for the government and citizens of India to have some steps to tackle the very grave issue of terrorism. I am not sure what the steps could be, but someday I really hope and feel that mankind and humanity would emerge as a winner. The world would become a much better and safe place to live in, in the absence of which no economic growth makes sense.

Abhishek Mohta
2nd Year, M.Mgmt.
SJMSOM IIT Bombay

The year 2008 will go down in history as one of the most troubled ones. For one thing, the world saw a great financial meltdown, termed as the “financial-tsunami” by the financial czar Mr. Alan Greenspan, the former Chief of the Federal Reserve of America. The closure of many grand financial institutions of America and Europe almost brought down the economy of most of the developed countries. Moreover, its ripples were also felt in developing countries like China and India.

The story, however, is somewhat different when the current global financial turmoil is analyzed in the Indian context. First, for India it has been an external phenomenon over which she had little power, and second, the Indian economy is least exposed to it, attributable to its conservative and robust financial system and government policies (compared to those in the western countries that took a hit). Add to that the fact that India is one of the fastest growing countries, second to China, fueled by a young work force, largest middle class, growing service sector among other things. Consequently, India has seen a growth rate of above 8% for past few years and even with the current scenario, the projected growth is a handsome 7.5-8%, according to IMF, which is not what many countries can say for themselves. Therefore, India is pretty immune from the current financial crisis.

But, on the other hand, the surge of terrorist activities, both internal and external, has caused a wave of concern. The clashes between different factions in the name of region, race and religion have increased significantly over the past few years. The Godhra riots of 2002, the bombing of the train en-route Lahore in 2007, and the ghastly developments in Mumbai 26/11 are still fresh in the minds of innocent people. These secessionist movements challenge, and even undermine democracy, the very foundation of the Indian constitution. It is gradually eating away the very fabric of society; our trust and faith in it, rendering the country into the hands of anti-social and self-serving moths. If ignored, it can tear apart the villages, the cities and the country.

Gyalpo
1 st Year, M.Mgmt.
SJMSOM IIT Bombay