GDP again

Do numbers like 5.3 – 7 – 9 make any sense? To me it surely rings GDP. GDP growth 5.3 is the actual announced for the last quarter, 7% was promised, 9% was actually where we were. Recently going thru the news and there was a mention of India’s GDP growth for the third quarter coming down to 5.3% way below 7% promised by the Government as recently as in the last budget speech couple of weeks ago. I always had my own doubt on this GDP guy any ways as expressed in my earlier blogs and hence felt the responsibility to write on this issue when it made news headlines once again.

Well I have been going thru tons of information and hearing/reading as many analysts as I can. Finally I could find some solace in one announcing “Won’t get better soon, learn to live with slowdown”. I know you must be shouting “Solace?” I would still say “Yes” because he declared the truth and wanted us to accept the fact instead to keep us seeing Government’s false claims that we are not much affected. It’s time to start planning to handle the given situation now. Please change your mode from “Growth” to “Survival” if you survive you will eventually grow for sure. Bad news is rupee has taken the upward path again, new numbers to chew upon 50 – 52 – 54 - - - 60. We have started from Rs.50 for a dollar and already reached 52, near future we must see 54, that’s what the analyst have been saying, today morning in the GYM my CFO friend announced it will eventually go to 60. As soon as he was away few of the other friends who did not want to believe to this wild suggestion commented “How can one make this kind of statement, I simply do not believe””60, but when, he should answer that too” added another. Well at the end of the day we all were in the denial mood. Rupee flexing the muscle any way left me gloomy and I had no interest in flexing my muscle any more in the GYM.

Earlier to this my CFO friend also commented “All the major economy is in negative, that way our net growth compared to all those economy is still better”. I would say we never stop these feel good self solacing business. Worst part is agriculture is substantially down, Industry contributes mere 0.5% to the GDP. The sector which contributes the maximum is services and I have my own doubts on this sector as there will a lot of false elements contributing here.

Any ways guys still more bad news for people in IT and ITES as well as in job. Obama Government announced that the companies which have taken support package from the Government will not be allowed to outsource. That means millions of Indians will hit the shore from US soon and we will lose on the outsource business too. There are say about 6 million Indians abroad who remit some $30 billion a year. Labour migration has been the force behind globalisation which has gone is reverse gear for now. Recently I was chatting with a friend who is heading a US companies operation in India, on this he commented “Tell me, how they are going to implement that? How are they going to segregate? Example AIG has taken the financial package and they have a partnership in India, Do you mean to say the Indian arm will have Americans now?” I actually had no answer but for the sake of answering I said “You know, in US they plan everything to the minute details, I am sure the Obama administration would have done that”, he had no option but to accept that.

The positive side is Government announced few stimuli packages. I think the substantial one was on FDI which has surprisingly made quite less a headline. It is just like opening up the flood gates, I understand there is not much funds overseas but as soon as there is a flow it is bound to flow handsomely this direction. If things goes well we might see some Investments, may be from gulf region. Yesterday RBI announced the CRR cut of 0.5%, a third one in a row. If the banks finally decide to pass it off to their customers it should be good, they did not adhere to in last two anyways.

I conclude from the statement made by one of my friends in the armed forces. In the armed forces the proverb goes, "if rape is inevitable lie down and enjoy it". Civil society, it is perhaps, "God, give me the strength to change what can be changed and endure what cannot be changed, and to know the difference between the two" and” something is better than nothing" etc.

Philosophy has the last word.