"I was asked what I thought about the recession. I thought about it and decided not to take part."
-Sam Walton
Dear friends,
It has been a long time interacting on this blog. Has the heat put us down?
Just read the news report on Summer placements at IIM-K and JBIMS, and found no reversal as was expected. Sure people might have had to work harder to achieve that than the previous year.
Indian economy with all downsides taken into account will grow at 7-7.5% this year. We should be able to see some credit expansion in next few weeks. Activity and business subdued as it was will resume.
Moreover short term stock market performance is not the indicator of countries economy. Stock market represent less than 2% of national assets of India. And thankfully many Indians till today do not invest in stocks so they have not suffered huge wealth erosion. We need to bring these people into investment and consumption cycle in a bigger way. Domestic consumption of Indians is not going to be affected in a big way. This was appended by CEO of HUL recently for FMCG sector.
Agriculture credit may shrink a bit but last years investments is already bringing results with bumper production this year, which means more money in the hands of the farmer. Agri-input sector therefore by and large will do well. Banks cannot be written off either for we have seen good performance by PSBs and HDFC bank. We will have some slow down in retail, because even in the boom companies were not making money because of higher costs, now it is going to be even more tougher for them. Food processing is going to remain strong.
The whole crux of this small piece was that if its not rosy now doesn't mean its gloomy either.
We should think factually rather than based on sentiments.
