Finance Friday : India To Lead Global Recovery

Good news is always pleasant to the ears and when it has India in the mix, it becomes much sweeter. "Economy" has been the buzzword since almost 2 years and for all bad reasons. With things settling down at a much slower pace globally, India has been rather impressive with its economic growth . The testimony has come in the form of increased Foreign Investments and increasing IIP numbers marking a good industrial production.

According to the Regus Business Tracker survey, Indian firms are expect ed to see signs of recovery by March 2010. India being the most optimistic of the 15 countries surveyed, far surpassing the global average.

India is expected to lead the global recovery rally

The survey was conducted by Regus plc and the audience included over 11,000 corporate across 15 countries. The survey’s result depict that a strong economic recovery is not expected to begin until summer 2010.

India is expected to lead the global recovery rally as companies in the region are likely to witness significant improvement in their position as early as March next year. The results are in sync with the India’s corporate outlook.

India’s corporate outlook on economic recovery coincides with an increase in profits that surpassed the international average:

• 45% of Indian firms saw profits increase last year, versus 40% of companies globally. 
• Likewise, 49% of Indian companies experienced an increase in revenues last year (versus 46% globally).
• Even amongst those that experienced a decrease, 56% expect revenues to rise in 2010.

The survey also pointed out that,

• Developed countries like Germany and the US are likely to see economic recovery by August next year, while the UK would witness rebound by September 2010.
• South Africa would witness commencement of significant economic recovery in May, while for Australia, Belgium and Canada it would be in June
• China, France and Mexico would see economic rebound in July

What’s interesting of the survey results about India is the active contribution by the SME sector,

• 57% of Indian companies of corporate size indicated that they expect revenues to increase next year
• 85% of SMEs (fewer than 50 employees) expect to see their revenues increase in 2010, compared with 72% of large companies.

This clearly suggests that small businesses will the Growth Drivers of the Indian Economy. This goes to show that being big does not always mean being the best. In my opinion, the revenue expectations of the SME’s also suggest that Optimized Bottom Lines are key to profitability because SME sector by its sheer nature is lean.

However, according to Regus’ Country Head Madhusudan Thakur ,

"The relatively positive prediction from Indian firms has to be tempered with an element of caution, with astute firms remaining tightly controlled in the beginning of next year"

All said and done, India Inc. needs to keep on the momentum and carry on the growth trajectory. With the rest of the world still bleeding, it might as well be our chance to beat them to the top or at least inch closer.

What do you think? Can India maintain its growth momentum and achieve a growth rate of 7-7.5% next fiscal.

Disclaimer: Regus is one of the Trak.in Sponsors

[This Finance Friday post has been written by Ankit Agarwal, an ERP Consultant by profession, a wannabe entrepreneur and stock market stalker by passion]

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Author: Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.

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Tagged as: business tracker, buzzword, Company Profits, corporate outlook, economic rebound, economic recovery, economic-growth, foreign investments, global average, Global Recovery, IIP Numbers, Indian GDP, Indian-economy, Regus, regus plc, revenue growth, significant improvement