It’s been almost a year now. The domino effect of the sub-prime crisis shattered the global economy. It first started with the fall of Lehmann Brothers. Bank of America gobbled up Merrill Lynch in a desperate fire sale. Fannie Mae and Freddie Mac had to be bailed out. And if that wasn’t enough, even the financials giants like Citigroup and AIG were resurrected from what seemed like certain death.

The waves of this financial tsunami swept through the entire developed world. Even developing countries India weren’t spared of the consequences. So from the highs of 9% + levels, the GDP came crashing down to 6% levels.

To tackle this slowdown, the Govt. of India and the RBI came out together in full force. Acting in unison with the other central banks, the RBI pumped in massive amount of funds into the system. It ensured that the lending rates to borrowers were lowered substantially to prime up the demand. The Indian govt too played its part. As a part of the demand boosting measures, it unleashed a series of fiscal stimuli. These steps have reduced the pace of the downfall and ensured a soft landing for the Indian economy. However recent economic data suggests that we may soon turn the corner or have actually done it!

After 5 consecutive months of decline, the IIP (Index of Industrial Production) numbers entered the positive territory for the 1st time in May 2009. Industries in core sectors like automobile, cement, etc have posted a stellar set of numbers. Consider this. The sales of the top 4 automakers in India went up by a whopping 33 % compared to a year ago. The country’s second-largest carmaker, Hyundai Motor India, reported a 53.94% jump in sales. Not to be left behind, even the cement sector has been one of the outstanding performers of India Inc. While the profits of the overall sector shot up by 36%, individual companies like ACC almost doubled its net profit. Even the I.T industry – in spite of it’s over dependence on the US economy has managed to post extremely healthy set of numbers. Companies like Infosys and TCS – the poster boys of the Indian I.T industry have expressed a strong confidence of riding out the global slowdown.

But you may ask how is all this going to affect us? In a substantial way! With the placement season round the corner, this piece of news only bodes well for all of us.

Abhinandan Nardekar

BITS – Pilani