Hi folks,
This was our paper (Robin,a batchmate and I) which was shortlisted for presentation at Institute of Public Enterprise,Hyderabad.
Executive Summary:
The global financial crisis and the subsequent recession in the Western economies led to an economic slowdown in India. The slowdown which started in July 2008 still continues and has been tackled reasonably successfully, thanks to the concerted efforts of the central government and Indian corporates. Exports were badly down and lakhs of Indian workers lost their jobs. Credit crunch and low domestic demand further aggravated the woes of Indian companies. Fiscal stimulus packages along with drastic cost management helped India Inc to register a healthy growth of 6.7% in the last fiscal. A strong and conservative regulatory mechanism along with a sound banking system, little exposed to the toxic assets of US banks, saved India from further doom. The sensex has risen to 17000 in December 09 from 8000 in February 09 clearly indicating the rebounding confidence among domestic and foreign investors in the India growth story.
The next 18 months pose significant opportunities as well as challenges. Challenges include a high cost of borrowing, corporate governance, leadership and the same old infrastructural bottlenecks. Most of the major companies have improved their toplines and profitability in some way, though some sectors like real estate are yet to turn on the significant volumes.FDI and FII flows have resumed interest and ample liquidity exists in the system. The focus of India Inc needs to be on implementing corporate governance standards,inclusive growth, skill-building and “going green”. Political will and a pragmatic approach to policy-making would do wonders to further the sustainable growth of Indian companies. Any amount of complacency in reformist policy-making and subsequent implementation can severely jeopardize India’s chances, as it can’t take its place as the second fastest growing economy for granted.
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