Comments on: Headache Balmer…

By: rummuser

rummuser — Mon, 02 Mar 2009 14:33:27 +0000

If the IT industry has got any sense, they would heed what Nandan Nilekani says in his wonderful book. This is the time to go after massive computerization of the Indian businesses. People like you should go after small and medium businesses to get them to put in ERP. By the time West gets back on it feet, our industry will be able to take them on more efficiently and also be cost effective. The present situation presents an opportunity.Perhaps some of the laid off people can become entrepreneurs. I wish that I was thirty years younger!

By: Jaisundar

Jaisundar — Sun, 01 Mar 2009 18:26:45 +0000

Absolutely – Our experiments with Socialism and resulting regime of protectionist policies somehow seem to have worked in our favor in the current state of world economy – at least so far. India seems to have adopted economic policies that, to borrow a quotable quote from you, seem wise in hindsight.

I was at Big Bazaar and a few other electronics showrooms here in Mumbai in the last few days and I see absolutely no sign of any anxiety or restraint among shoppers.

Having said that, the IT boom has significantly boosted the purchasing power of the ‘burgeoning’ Indian middle class. The top ten India based IT companies including Infosys, Wipro, Satyam, TCS provide employment to around 500,000 Indians – and if you include the BPOs- the call centres etc, we are talking about roughly 700,000 employees. With a huge disposable income, this segment has had a significant influence in the boom we saw in the Real Estate markets, banking and financial services, automobile sales, retail sales and so on.

The kind of impact this slowdown is going to have will likely become apparent in the next few months when IT companies that depend on US business (to up to 60%) complete their appraisal cycles – I would hazard a guess that on average, each company would lay-off around 10% of their employee force. We are talking about close to 50,000 to 70,000 jobs being lost.

While the global slowdown may be attributed to specific macro economic flaws, I sometimes think it may also be fanned also by a worldwide wave of irrational hysteria and over-reaction.

I wish I had slipped into bollywood as a script writer! Or stated an Udipi restaurant.

By: rummuser

rummuser — Sun, 01 Mar 2009 16:50:01 +0000

Incidentally, 6% growth, though lower than earlier growths that we have seen, is not something to sneeze at. West could not grow at more than 2 to 3% the past decade and a half or so!

By: rummuser

rummuser — Sun, 01 Mar 2009 16:48:38 +0000

It is unfortunate that you are exposed to the IT industry more than other manufacturing industries. At the macro level, it is not too bad for India compared to other countries. Let me quote from a recent analysis by The Foreign Policy Research Institute

E-Notes
Distributed Exclusively via Fax & Email

ASIA’S ECONOMY:
CHALLENGE AND OPPORTUNITY FOR THE OBAMA ADMINISTRATION
by Terry Cooke

February 27, 2009

“India, which was even later than China to plug back into the
global grid following its failed experiment with socialism,
is now enjoying some of the benefits this relative
insulation has conferred in the current crisis.
Additionally–and uncharacteristically for Asian economies–
it has a relatively highly developed service economy, which
lessens its economy’s weighting toward manufactured exports.
Due to these and other factors, India appears positioned to
withstand the financial turbulence in 2009 with its growth
momentum reasonably intact. Having registered approximately
8 percent growth in 2008, it appears on track to achieve
close to 6 percent growth in 2009.”