It takes two and half to tango! 
To be precise, two and half years. An empirical research carried out by ICRA of rate hikes and its effects reveals that (ill)effects of hikes percolate after two and a half years of its implementation in the Indian economy. Just a quick recapitulation – the Reserve Bank of India (RBI) has raised borrowing costs nine times since October 2004! So you now know how to interpret these rate hikes, which has found few supporters and the rationale behind the hikes is still boomeranging all around. The fate of India Inc., which managed to capitalise well on the crest of India’s economic cycle, now hangs in balance, as fears of a possible trough in the economic cycle becomes eminently imminent.
To be precise, two and half years. An empirical research carried out by ICRA of rate hikes and its effects reveals that (ill)effects of hikes percolate after two and a half years of its implementation in the Indian economy. Just a quick recapitulation – the Reserve Bank of India (RBI) has raised borrowing costs nine times since October 2004! So you now know how to interpret these rate hikes, which has found few supporters and the rationale behind the hikes is still boomeranging all around. The fate of India Inc., which managed to capitalise well on the crest of India’s economic cycle, now hangs in balance, as fears of a possible trough in the economic cycle becomes eminently imminent.A survey conducted by Federation of Indian Chambers of Commerce and Industry on 418 companies showed business confidence index sliding to 69 points during the fourth quarter of 2006-07 from 75 points, as compared to the figure of 75.5 points during the same period of the last year. The business confidence of India Inc. fell on fears of falling demand for housing, construction and automobiles. However, here’s some good news for the weak-hearted: A majority of pundits are of the opinion that interest rates might have peaked, but mind you, so have the profitability of the Indian companies. The FY07 performance of companies listed in India appears good considering the fact that consumerism (domestic demand) in India is at its life-time high, coupled with company favourable global macro-economic indicators like higher crude oil and metal prices. Results from telecom, cement, banking, automobile and metals space is a testimony to the above statement.
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Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Read more:-
Source: IIPM Editorial, 2006
An IIPM and Management Guru Prof. Arindam Chaudhuri's Initiative
Read more:-
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