Plus&Minus

"A weekly column: Plus&Minus will be published in Hindustan Times, Jaipur Live every Sunday. This will speak to the ordinary reader on contemporary economic issues in a simple format".

Good Times Here Again
Hindustan Times, Jaipur Live, June 08, 2009                                           <<Archive>>

By Pradeep S Mehta

“WHEN IS the economic situation likely to improve?” is a question often put to me.

According to one survey, about 58 percent people expected it to remain the same, while 27 percent believed it will improve in the next six months. I belong to that minority. Why? Let us look at some indicators: the Sensex crossed the 12,000 mark after having taken a hit in the recent past, and the same phenomenon was witnessed in the western markets too.

On the other hand oil prices crosses to nearly $ 58 a barrel, while the core multipliers, steel and cement production and prices, went up.

The new mini car Nano raked up booking deposits of over Rs 25,000 mn in just 18 days. This is a reflection of people being willing to spend more. I am an optimist, and believe that the economic hardships of the last couple of years might soon become a thing of the past.

The rate of job loss, a major consequence of the recent economic downturn, seems to be slowing down. This is certainly true of the US economy, which still continues to be the Centre of the world economy, and it is due to reduction in our exports that our own economy is decelerating.

The improvement in economic health of the United Status, therefore, is sure to have a favourable impact on India.

In India the economy never stopped growing. It is only the tempo of growth which slowed down. But there are definite signs that the rate of growth has now begun its journey back to the high levels.

The decline in manufacturing output, a phenomenon which was being viewed with alarm in 2008, has now almost stopped. With agriculture having performed well in the recent past and the services sector still expanding, it would not be surprising if the growth rate of national income for 2009-10 is markedly higher than that in 2008-09. There are distinct sign that the economy is regaining momentum.