The export levels of India have decreased quite drastically and now the government has decided that it is the time to perform some countermeasures. A wise choice if you ask me. They have to decide to implement some taxes brakes and waive some import duties. That surely could boost some trade levels.
The main trading partners of India have always been the USA and Western Europe. Although the global economic crisis has not had a crushing impact on India, it wreaks havoc on European and US economies. These economies on the other hand affect the economy of India, meaning that the global economic crisis has caught up with India. Now the government plans to promote trade with Eastern Europe, Australia, Latin America and Africa thus increasing trade levels. If this plan succeeds that should lift the export levels and the whole economy of India.
Actually no matter the outcome the fact that the government is really taking some measures is superb. Lowering the taxes seems like the perfect tool to battle the global economic crisis, though some governments think that it is the time to increase various taxes to increase the overall income of the country. While increasing taxes may seem like a good idea in theory, in real life it has the opposite effect. It actually decreases the income as people have less money to spend and enterprises crumble under the heavy taxes. This is a perfect breading ground for shadow economy, starting form evasion from taxes till salary in envelopes. Sometimes it really seems that the people that we have voted in our governments have absolutely no clue about how the economy actually works.
Let’s hope that India’s example will influence other countries to similar actions, but I would not actually hold my breath about it.
