2009 setting out from grim reality after global meltdown, India did a lot better because of the less exposure it had highest saving and growing population. But there are higher expectation in 2010, so how is our economy doing, state of Indian economy and its challenges.
This time mode in shopping malls and Mandi happily coincide with stock market. This is confident but not exuberant from the far cry and despair from 15 month ago, when LAHMAN BROTHER Collapsed in mid September 2008.Sensex is up120% from 7000 to (appox.)17000. Its just reflects the health of the Indian economy. India GDP growth rate which decline to 5.8 % in second half of 2008 -2009 from robust nearly 8 % in first half is now back up at well 6%. And consensuses seem to be that India can grow about 7%.Private player will be on driver seat taking leverage of government stimulus package. But growth this time will not be panacea for all problems of the government. It is accompanied by rates rural India inflation that has not been seemed for decades. Food prices inflation rising at 17 % and gets worse in rural India where agricultural labour inflation index top 20 % in December. Desperate govt last week increase ration supply of wheat and rice by 10 kg to poor family. This week RBI top did with raising CRR by 75 basis point with aim of flashing out money from the system and attack inflation that will hit the growth. This where budget become crucial this year for India growth story hinges as much interest rate as majors that fin minister announces chief among them an early transition to GST and road map to reduce deficit currently 6.8 % to 6 % next year and 5 % following year.
Price rise, job creation these are the relevant issues right now. Govt does have to manage growth rate and not over stretch balance sheet last year there was certain sector does better these are the guys poise to do even better next year.
AUTO SECTOR ON FAST TRACK
Auto export 2010 was buzzing with global player lining of car made for india.GM has INDIA centric buzz, TOYATA launched ETIOS among others, if auto mobile is pulse of economic health, than INDIA is zooming, number tells their own story in last month of 2009. INDIANS bought 149097 cars & 767796 two wheelers .Total 1000500 unit combines car ,2 wheelers & commercial vehicles ............this is the 68 % jump from last year and highest so far in 2008 -2009.
TELECOM SECTOR
When gets tough people go get talking, telecom companies castanet on ever argument of customer. With over 500 million customer and 10 mn adding every month. INDIA is the fastest growing telecom market in the world. Growing at over 20 % rate industry set to contribute Rs.45000cr to GDP. There is a huge opportunity lies in rural INDIA ,the tele density in rural INDIA is 18 % .There is long way to go in rural INDIA .And as we analysed rural India is not so unprofitable as talked of.
RETAIL SECTOR
When Chennai based retail went bankrupt, every one think retailer had beaten too much. They may have spoken too early. Kisor Biyani promoted pantaloons recorded 51% rise in net profit for Q3 this year. Even as retail big bazaar, reliance retail & Spence consolidate small retailers like koutons, big apple & 6 ten are gearing up the caisson INDIA’s growth story. Infact this year $400 retail sector is expected to contribute 22% to economy.
Sectors such as auto telecom retail has defiant slow down. Expert says sectors like IT, financial & export will bounce back big time, what we are hoping for upcoming budget is that govt to provide clear road map to this industries still rallying under impact of slow down and bring them back.
By :Pramod Kumar,
Co-ordinator, Team kaizen
National Institute of Industrial Engineering (NITIE)Mumbai- 400 087,
Ph: 09619534121
Yes, it is true that Indian markets are growing right now than previous year. But these figures can be depriving also. We should not become too joyful by looking at the growth figures of various sectors. The fact is last year all these sectors did not perform well and in fact, in auto sector, companies were in red while showing their bottom line. So if we really want to judge the growth rate of the industry, we should check the CAGR growth for last 3 years.
ReplyDeleteFor telecom sector, growth is becoming stagnant at this particular time. We can see more than 100% tele-density in cities. This shows market is coming in to maturity stage. But yes, there is a growth opportunity area in this industry and that it induction of 3G and above technologies. But due to slow movements and lot of politics companies are not that much eager in this area now.
Retail sector is, again, getting the pace. Currently the organized retail is still contributing very less and there is a scope for growth in this area. But as we have seen it in late 2008, previous growth model of modern retail did not work well and we saw closure of some firms. Hence companies now have to work out to tune its model to get better growth. Once in 2007/08 India was on the top list of the retail market in the world, now it has gone down. India should work to get that position back.