India 2011 – Outlook
I am happy that the following predictions of mine had come true.
1. Continued stimulus measures by Developed countries in the world.
2. My prediction for India's Economic growth last year and this year.
3. Adoption of a concept of Permanent Crisis Management Mechanism by Euro Region based on my concept of Permanent Stimulus for Economic Growth as in my blog.
4. Higher mobilization of funds through non conventional sources by Government.
5. Capitalisation of land bank in the case of sick PSU’s.
Positives :
• US, Europe will take some more time to go back to the old robust balanced growth in the economies.
• The countries from Asia will continue to support the global economic growth in the next few years.
• Economy is likely to grow at a rate of more than 9% and the growth can go up to 9.5%. If we factor in the rise in Agri commodity prices in the last two years, this sector of the Economy must have grown at much more than 8 / 10 per cent and our Actual GDP growth must have crossed already 10 per cent. Some how , this is not reflected in the GDP growth statistics so far.
• Growth will be driven by consumption increasing among the Government employees and Rural Population ( aided by increase in food prices).
• Infrastructure will continue to grow fast since many large groups have planned to implement large power projects and Road projects.
• Indian rates of interest are very attractive. There is likely to be a big level of carry trade and further FII investments. There will be a pressure on the rupee.
• Many of the corporates have restructured their operations during the crisis and have become nimble and flexible in their operations.
• Most of the corporates have repriced their products services in this inflationary scenario, which has helped to achieve much higher profit during the year. The main beneficiaries are in FMCG sector.
• Most of the large corporates have big plans for growth , diversification and cross border acquisitions. Apart from the funds available locally, they are raising, planning to raise funds from other sources.
Risks to the Growth
• Risks to individual fast growing Industrial and services sectors on account of latest developments in relation to the regulation and competition in these sectors.
• Rupee appreciating making our exports uncompetitive.
• Oil Price climbing above $ 100 a barrel. Fanning the inflationary trends. Since we meet more than 80% of our oil requirements through imports.
• Food price inflation and inflation in all other products .
• Increase in Interest rates
• FII withdrawals from the Indian market.
• Political uncertainities
Sectors which can give a good growth and profit Potential
• Commodities trading
• Investment Banking.
• Mining
• Agriculture
Sectors with good growth potential
• Banking and Financial Services
• Pharma and Healthcare
• Realty
• Power and Unconventional Power
• Auto and Auto components
• Road Development
• Education
• Media and Communication
• IT and ITES
• Venture capital
Sectors with good growth potential but not assured profits.
• Positions in Commodities and Currencies.
• Telecom
• Retail
• Airlines
• DTH
• Microfinance
• Life Insurance.
• Mutual Funds.
