20 Jul 12 According to ValueNotes research, a shot of positivity is all what India Inc. needs

Has the BRIC hit a wall? Is India the first fallen angel? Is there nothing Incredible about India? Was it a sudden phase of high growth? It’s like everyone has shifted from singing choirs to melancholy. Has India been the composer of its own fall?  All of a sudden, is there something really wrong with the Indian economy? These are questions asked by most of our clients.

No is my answer. According to me, the reforms and policy changes will happen in due time, what is really wrong is – ‘Perception’.

I have been interviewing CEOs and top managers of multinational companies across multiple industries for various research projects. They have all shared their predictions of the Indian economy for the next one year, along with predictions for their industry and theiuntitledr company.  According to this survey, 55% of the CEOs I spoke to felt that the worst is yet to come for the Indian economy and the growth will dip in the next one year. Out of these, 35% believed that the growth will remain flat while only 10% believed that the growth will revive over one year. Interestingly, they have very similar feelings for their industry. But when asked about their company, most were banking on growth. Almost 65% of the respondents said that their company was going to show decent growth in the next one year. This was because they knew that the demand for their products/services was there. Now generally companies show trends similar to their industries, but what our research revealed is that almost 65% of the respondents feel that they can outperform their industry as well as the Indian economy, but are not willing to risk executing their long awaited growth plans.

I have always advised clients and respondents, who are looking for solutions against this economic turmoil, to start looking at the positives of this economy and avoid negative remarks. This scenario is not as bad as it is made to appear. I think an opportunity assessment study on the Indian market will reaffirm my findings. More so ever this is the time when companies in India should realize that all the world’s negative sentiments weigh less than a small action of positivity by them.

Haril Joshi

Haril was a senior research analyst at ValueNotes.

1Comment
  • Kalakad Ganapathy
    Posted at 17:10h, 01 August Reply

    Completely agree that this (economic downturn) is more a matter of perception but this is what turns out to be contagious.Look at the state of economy now seven months after Dec 2011.
    The IT industry is far too dependent on Western economies and so any adverse impact in West has immediate repercussions for the IT industry in India. The state of economy can be gauged from the state of the job market which is egregious now. Companies are slow in hiring, decisions to hire are taking ages, retrenchment is in the air. The Maruti episode in Manesar is another blow to automotive industry, people are delaying decisions to buy vehicles, the state of real estate sector is no better.
    It is a vicious cycle.

    Despite claiming that India is a growth story, the events of the last few months clearly shows that we have walked two steps forward and four steps backward.

    The truth is that negativity is lapped up quickly however positivity takes a while to digest.

    Things are truly worrisome. Allegedly, 30000 jobs have been rendered redundant in the Silicon valley. 50000 people in Info are on the bench. IT sector employees are applying for lecturership in engineering colleges at 50% of their current pay.Companies that are hiring are getting the best deals as they hire new recruits at lower budgets than they had planned.

    But yes, a shot of positivity can render 10 shots of negativity ineffective. Is the market listening ? Will PChidambaram give a life saving drug that can wake up the economy from the current state of coma it is in ?

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