Amidst all the talks of recession and economic downturn talks that have dominated much of the last year, a single good news bought a wave of hope for the millions of investors. But then, as they say the good news was hard to come by and they never came in bulk.
But, the past couple of months have been rather good for the Indian economy with the Stock Markets scaling to respectable levels and the inflation coming under control ( though we had a problem of being sucked into deflation).
As for the health of economy, only numbers / stats can gauge the true state. Luckily, the past few weeks have provided good numbers be it industrial output, inflation, corporate earnings. The industrial production (IIP) numbers and the corporate earnings have specially managed to pull back to decent levels.
Here is a small list of some economy pointers which showed good growth,
- IIP Numbers cross the double digit mark – The IIP (Index of Industrial Production) for the month of August 2009 rose 10.4% as against 6.89% in the previous month.
The factory output registered a strong growth on a year-on-year basis and the manufacturing output stood at 10.2% as against 1.7% a year earlier - Industry Acknowledges The Success Of Stimulus package – The Centre’s stimulus package which was initiated last year to give a boost to the economy has been acknowledged by the corporate to have served its purpose. (Source: Yahoo Finance )
- Exceptional Performance From Some Sectors
- UCO Bank second quarter profit soars 39% at Rs 208 crore
- Bajaj Auto posts highest-ever quarterly profit at Rs 402.83 crore
- Crisis says that Indian Companies Credit Quality is improving – The credit quality of Indian companies have stabilized after falling considerably last year. Crisil’s Modified Credit Ratio (MCR) increased to 0.88 for the first half of 2009-10, after dropping to a nine-year low of 0.86 in 2008-09 . Even though the increase has been marginal, it is still a good pointer that Indian companies are faring better on the back of lower commodity prices and the recent stock market gains
However, none of this suggests that the bad days are over completely for the Indian economy, there is hope that we will get by fine from the after affects of the U.S. financial crisis with only a few scars unlike the rest of the world.
[This Finance Friday post has been written by our regular contributor Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]
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{ 3 comments… read them below or add one }
When we look at the statistics, everything looks normal and satisfying. But still we are not totally isolated from world economy. The growth in GDP, industrial production is all because of domestic consumption and may be slightly because of exports. The growth numbers which we witnessed in boom time i.e. from 2005 to 2008 was because of the foreign markets dependence on Indian markets in IT, ITES, Jewellery, Agriculture etc. Now there is slack in demand in foreign markets, they will not see to India to take our products or services, which in turn will reduce our National Income or GDP.
Therefore still we should be cautious and keep our interest rates low till the foreign markets pick up and the growth takes its momentum.
I totally agree with u prakash from the fact that our economy is not isolated from the world economy, but still the data which is posted in the article by ankit suggests that India Inc.’s growth is on a rise …which is gud for everyone. IT n ITES companies were facing a lot of difficulties because of lack of demand for their services n products….but that situation is also somewhat improving……slowly n steadily these companies are on a hiring mode because of their expansion plans (which were not there in the past) and also bcoz of the projcts which were in the pipeline…!!
Export oriented companies are mainly affected by the Rupee appreciation and depreciation, these companies were making profits when dollar was @ 50rs. but the value of dollar has now decreased which is makin the life of these companies difficult now…!!!
@prakash I second ur opinion on the part that stats may not reveal the true picture.But then, they cant be neglected either.Moreover with so much bad news tht we have been hearing over the past year or so, i thought compiling a list of good news wont harm.
U pointed a good point wrt to domestic consumption.This downturn actually helped us understand the domestic demand and consumption scenario.With global markets going weak, the companies actually looked at the domestic markets which were unexploited.So, now India inc is in a better position now.if global markets pick up again, the profitability is only gonna get better
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