Friday, August 28, 2009

Economy showings signs of positivity

By: Subhadeep Bhattacharjee

After months of pessimism and uncertainty that loomed around the world market as a whole and Indian markets in particular are showing signs of positivity. The market might be doing a yo-yo but if we read the markets carefully we will see the it is making steady progress. Although its very hard to call the market bearish or bullish but it definitely is stabilising. Close week to week analysis of the market will reveal that the market cap is increasing.

On the job front which effects individuals there seems to be some light at the end of the tunnel. The other day technology giant Infosys came out with a recruitment ad in major newspapers in the country. People working the IT sector may not be even able to recall how many months had passed since they had seen a similar ad which were common about a year and half back. But in the last year or so, such ads had become a thing of the past.

It is not just the case of one major organization hiring but many companies are filling up their posts although in a subtle manner. One benefit of the economic downturn has been most of the companies have learnt the art of cost cutting. Boorish expenditure has become a thing of the past and most companies and they increasingly inovated new methodology to better their productivity. In a vibrant market these things can go a long way in taking an organization way past its competitors.

Another good sign is there has been an increase in consumer expenditure. About six months back people had limited their expenditure to only necessities in life out of fear and uncertainty. This meant business in the luxury sectors took even a bigger hit than FMCG and the services industry. But after sitting in the back benches for early part of the year these sectors are again coming to the forefront.

The poor monsoon though has dented some of the enthusiasm that the markets had seen since the new government had come to power. With the monsoon being weaker by 20-50% across the nation the rural economy is expected to take a beating. In his budget Finance Minister Mr. Pranab Mukherjee had stressed on the need to boost the rural economy which will in turn boost the entire economy as the consumption of goods and services in the rural areas goes up.

It is too early to set a time frame for a complete recovery to happen but things are definitely better than what they were in the early part of 2009. We will definitely enter 2010 with much more excitement and optimism that we welcomed 2009.


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