NIFT UG 2015 Question Paper with solutions

  We have come a long way since the acronym ‘BRIC’ was coined in 2001. Emerging markets are now an integral part of the world map and this elite group of nations has firmly positioned itself as an important catalyst driving global growth. However, these economies too are vulnerable to global hitches, as was evident in 2011 when most emerging markets, including India, China, and Brazil witnessed a drop of over 18% even as developed economies like the US registered a growth of 5% against all odds. The first three weeks of the New Year have caught everyone off guard with emerging markets racing ahead of their developed counterparts. From being one of the worst performers in 2011, India has rallied by more than 9.5% followed by Brazil (7%) and China (6.9%). While such a momentum may not be sustainable over a longer horizon, no one can ignore the fact that the combined population of China, India, Brazil and Indonesia amounting to 3 billion or 43% of the global population will drive consumption demand in these markets for decades to come. Secondly, these countries do not have to face certain critical issues that the developed world has to address. One of the critical challenges for developed economies relate to entitlement issues, as they struggle to take care of their citizens’ needs pertaining to health care and unemployment. While analysing growth trends in these economies, it is important to understand the difference in terms of the nature of the growth. Emerging markets are moving along a natural growth trajectory, driven by several factors as mentioned above, whereas developed markets are being forced to induce growth through various stimulus measures amid a scenario of peaking unemployment and near-nadir consumer confidence levels. This induced growth in a way also helps the cause of emerging markets since most of these economies derive a substantial portion of their GDP from exports.