Quantitative Easing (QE) by the Federal Reserve of the U.S had caused huge inflows of dollars into the emerging markets at the rate of $85 billion per month. These inflows have inflated the value of assets especially the equity for several months. When Ben Bernanke indicated the tapering of the quantitative easing, the equity markets especially in the emerging markets tanked and the currency markets in general and the currencies of BRICS in particular have become volatile.
The Indian economy is going through turbulent times. What started as a knee jerk response to the Federal Reserve’s decision to taper the quantitative easing has escalated into a full blown financial crisis and the economy has started slowing down at a growth rate of 4-5%. The value of rupee has fallen to the lowest value in history. It fell to Rs. 68 per USD. The banking sector has been hit and the NPAs are assuming mindboggling proportions. Many industries especially those which depend on the American and European markets have been severely affected. The twin deficits of fiscal and current account are threatening to blow up all our expectations. In addition to this, the commodity market fiasco has shaken investor sentiments and has raised several questions on the role of auditors. Growth rate of employment is pathetically low and bankruptcies and closures are increasing rapidly. Debt default by the Indian Corporates rose to 4.5%, a 10 year high in 2012-13. At this juncture, the paralysis at decision making level has started sending negative signals to the investors.
There is a need for the academicians, industrialists and the administrators to come together to discuss, debate, deliberate and reflect collectively to look into our experiences, the present scenario, the challenges and the future trends.
In this context, we at LIBA are organizing a one day conclave on Oct 18th 2013 to learn, to discuss, to analyse the prevailing challenges and identify feasible solutions.