Mumbai, India (PressExposure) May 09, 2009 -- Indian SMEs anticipating a grim 2009-10, following forecasts of a long and deep recession by experts, can now breathe easy. After witnessing a lull in economic activity for the last 7-8 months, the Indian economy appears geared up for a recovery.
Economists and investment bankers expect the market to revive as early as September or latest by December. With the economic scenario expected to improve in the second half of the current financial year, small companies are hopeful that business would pick up and they would post better results.
Analysts are expecting growth in the financial year 2009-10 to range from an optimistic 8% of the gross domestic product (GDP) to a cautious 6%-7% in the last quarter of the year. The Confederation of Indian Industry (CII) has pegged the growth at 6.1%-6.5% forthe current financial year.
Things looking up
The indicators coming from all quarters are positive, pointing towards an early revival. The overall demand for goods, which had slumped considerably over the past few months on account of recession, is gradually picking up in some sectors.
According to experts, renewed demand in the domestic market would restore growth in certain segments. In addition, fall in interest rates, fiscal incentives, moderation in the price of essential commodities and reductions in indirect tax rates would also drive the market recovery.
âEarly signs of recovery have begun appearing in some sectors. A sustainable upward growth movement is likely to occur by the September-October period when economic activity is expected to be at its peak. Small and mid-sized companies have started taking measures to upgrade their industrial production and demand is also picking up on the domestic front. These are a few pointers indicating that revival may not be too far away,â commented K Nihalani, Director of a mid-sized investment consultancy firm in Kolkata, Adelina Investments.
Caution is the keyword
However, experts have indicated tough times for some industrial segments. Textile, IT, apparel and export-oriented sectors may have to wait a while longer for recovery since their revival depends on the global market conditions.
âRevival signs may be deceptive and the growth projections of 6%-7% may become improbable if the global scenario takes a negative turn further. Though we are hopeful of improvement to take place post-July, we would like to be on our guard.â said Nikhil Agarwalla, Financial Executive Officer, Futures First, a firm involved in trading activities in derivatives in the UK, US and Europe exchanges all over the world.
Experts predict certain key sectors to bottom out in the next two quarters and demand to slip in the export sector for textiles and jewellery. They further believe infrastructure projects to drive demand in key sectors like steel, plastic and cement. However, oil and gas is predicted to post a flat growth.
Though a positive turnaround in the market happenings seems likely to take place during the second half of the current financial year, exercising prudence will help small firms come out strongly when the market revives.
For more information visit: [http://products.bizxchange.in]
Saurabh Garg 2nd floor, Response Times of India Bldg. Dr.D.N. Road, Fort Mumbai-400001