Optimism about economy emerges

Amidst signs of recovery, concern over India’s recession is gradually being overpowered by optimism that a recovery is taking hold. What has led to this confidence is that a string of indicators ranging from car sales to services sector activity have notched higher last month and there are signs of a robust demand in an economy that’s primarily driven by domestic consumption.

Albeit industry estimates expect 8.2% dip in GDP in the three months through September, thereby pushing the economy into its first technical recession in records going back to 1996, this is a sharp recovery from the record 24% contraction the last quarter.

“While the farm sector remained the bright spot, supported by a good monsoon season and subsidized inputs, we think the recovery likely spread wider across the economy and is on the verge of becoming entrenched,” Rahul Bajoria, the Mumbai-based chief India economist at Barclays Plc, said.