Pink slips to rosy outlook

Saturday 26th of December 2009 01:50:55 AM


Pink slips to rosy outlook




New Delhi, Dec.25 -- A.Sridhar, 28, is a happy man.Sridhar was on the "bench" for more than six months after his employer, a leading information technology service exporter put him on the "virtual pool." In June, the company had announced a "virtual pool" programme under which about 8,500 employees, who had not been working on any project for three months, were sent home for up to six months on a reduced salary structure to cut costs.With new outsourcing contracts coming in, the company has called back 2,000 of such people on higher salaries.Sridhar is one of them.A slew of recent data releases confirmed signs of turnaround in the economy.The Indian economy grew 7.9 per cent during the July-September quarter-strongest in six quarters - on the back of higher consumer spending and private investment.After growing at close to 9 per cent for four straight years, growth had slowed to 6.7 per cent after a financial crisis in the United States roiled the global economy."We believe that the situation is improving.As of now we have reason to believe that the worst is over for the global economy and shows signs of improvement," C.P.Gurnani, chief executive officer of Mahindra Satyam told Hindustan Times.The acceleration in the growth of the broader economy through the July-September quarter was led by manufacturing, helped largely by a slew of stimulus measures unveiled by the government since last October.Industrial output grew by 10.4 per cent in October triggering hopes that the worst might be over for the Indian economy.Manufacturing, which accounts for 80 per cent of overall industrial output, grew by an average of 7 per cent since April Consumer durables' production grew at an average 19 per cent in the last seven months, perhaps mirroring higher purchases of goods such as televisions and refrigerators and growing consumer appetite.Automobile sales have clocked robust sales since the last few months.Importantly, truck sales by more than 131 per cent in November compared to the same month last year reflecting signs of strong demand for goods.At this pace India's industrial output is growing at the second fastest rate in the world, behind only to China's 16.1 per cent growth in October.The trend has begun manifesting in the broader jobs markets with strong signs that the long dark season of pink slips might finally be coming to an end this winter.A labour ministry survey released last month showed that more than half a million new jobs were added in the seven sectors- textiles, leather, metal, automobiles, gems and jewellery, transport and information technology during July to September 2009."During the previous quarter -April to June, 2009 employment in these sectors had declined by 1.31 lakh," the survey said."We will give our numbers for next year in April.We are hiring and we will increase our hiring, that much I can tell you," said S.Gopalakrishnan chief executive officer of the country's second largest software exporter Infosys.Buoyed by the sharp turnaround, the government expects India's gross domestic product to grow by about 8 per cent in 2009-10.High prices of essential commodities remain the biggest worry for the policy makers groping for options to keep prices down without upsetting the fledgling green shoots of recovery.The country is reeling under the impact of steep 18.65 per cent rise in prices of food items pummelled by a supply crunch in staple items such as potatoes and pulses.Early signs of enhanced supplies, however, could mean good news on the price front in the New Year.There has been a sharp rise in supplies of potatoes in recent weeks.In November 2.74 million quintals of potatoes have arrived in the country's wholesale markets, a sharp rise compared to October's 2.11 million quintals."Arrival of the new crop of potato has started which has eased the price pressure.If current situations stays put we might see a decline in price of the potato," S.Bhonde, additional director of the Nasik-based National Horticultural Research and Development Foundation told Hindustan Times.

"Price built up is on speculation post drought.Stocks of cereals are adequate and prices can be moderated and it will be from January," he said.

Hindustan Times
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