Recession evokes mixed reactions from Indian companies
20 Nov 2008, 1840 Hrs

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New Delhi, Nov 20 Global economic crisis has evoked mixed response from the Indian companies.

Though the slump is felt in India and the heat has impacted various sectors, still many entrepreneurs have expressed optimism about overcoming the current recession.

According to reports the Indian economy is likely to expand by 7.4-7.8 per cent during 2008-09 fiscal year, slower than nine per cent of last year, as credit crunch and global downturn trims growth.

Ajay Chowdhry, Chairman and Chief Executive Officer, HCl Infosystems India, said, the demand for the IT services in India, which is the fastest growing IT markets, may slow down due to the present economic crisis, but that would be temporary.

"If you look at about two months ago, it is a very well known fact that the fastest growing IT market in the world is India. So, I think to my mind, it may slow down slightly, in one or two sectors, which I mentioned earlier, but I don't think that the demand is going to go away. It may get postponed in some cases by six or eight months," said Chowdhry.

People in steel industry are equally enthusiastic about the demand for steel picking up on the presumption that fundamentals of the country's economy are strong.

India's economic growth projections ranging between six and seven per cent have given steel makers hope that the drop in steel demand may not be too severe.

"With the global slowdown, obviously like every industry, every sector, steel is also adversely affected. But, I think in India, because our fundamentals are still strong, our requirement of steel is still strong, it is still there, so it's just a matter of time. The demand is still there, it will again pick up further and there should be no problem," said Navin Jindal, Vice Chairman, Jindal Steel and Power Limited.

But Indian construction and engineering major, Larsen and Toubro (L andT) Limited, doesn't share this optimism. It is of the view that global recession has impacted Indian economy and the flow of funds and investment into India has stopped slowing down the implementation of projects.

"I think what has really happened of the global economy impact on L andT, obviously the export is slowing down, prices are dropping for lucrative export but more importantly the liquidity situation is caused with no more investment coming into India, no more funds coming to really give money," said Anilkumar M. Naik, Chairman, Larsen and Toubroimited.

Indian policymakers expect a moderation in economic growth to less than eight per cent in the fiscal ending March 2009.

Earlier this month, Prime Minister Dr. Manmohan Singh while cautioning about the severe and prolonged impact of global financial crisis, said that the government would take all necessary steps -- monetary and fiscal -- to protect growth.

World leaders at the G-20 summit in Washington backed a combination of measures to kick-start growth with better financial market regulation and more say for emerging countries as their response to the global economic crisis.

Signs are mounting of a painful economic slump in many regions, with the euro zone slipping into recession according to data last week, unemployment climbing in the United States and elsewhere and emerging economies slowing. (ANI)

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