With GDP growth dropping to 6.1% in the last quarter, the chorus of doomsaying about the Indian economy has grown louder. Many commentators think that 2012-13 will be worse. I am not so sure. Among the sectors responsible for the slide are mining and electricity generation. Coal mining is poised to look up in the coming months thanks to initiatives in the public sector; electricity generation has suffered for want of coal and this too is likely to be remedied to a large extent. These two improvements alone should lift the industry growth index in the year ahead.
That apart, there are several positives that should impact positively on investor sentiment in the coming year. The biggest, perhaps, is the defusion of the Eurozone crisis - at least for now. Then, FII flows have returned, disinvestment is poised to get a boost, FDI is doing well, and the government is no longer preoccupied with the Anna Hazare movement. The PM's Economic Advisory Council has forecast growth of 7.5-8% in 2012-13. It does not appear unrealistic.
More in my ET column, No, it's not a downward spiral.