P Notes banned, no liquidity in indian markets since US FIIS/banks are also pulling out. net result no funds for new projects by election time growth will slow down, property market will crash there will be no buyers only sellers. Companies will close down, unemploymnet will increase. all the major projects will get abandoned midway.Example wockhardt ipo failed so no new hospitals from wockhardt small contribution of pulling down growth and employment oppurtunites.same story will be repeated every where. worst sufferers will be real estate industry if you are lucky in one year time you will get property below the actual building cost, US banks have started vacating property in mumbai,software companies have started lay offs so who will want space. SEZ projects will get abondoned mid way. india needs loads of foreign money to drive growth. the tap has been closed.The biggest problem in india is we have a FM, RBI governor , advisors in north block does not understand once the growth curve changes its direction because of thier decisions it will take 100 times the effort and time to put it back on track
RE:Tough times ahead
by on Mar 18, 2008 02:03 AM Permalink
Good analysis, Bob. You might want to add inflation fears (due to increasing food price and gas @ $110) and crash of the Indian financial institutions following devaluing of the real estate, when people will give away their houses to the bank if they owe more on it compared to what the house will be worth (for those who actually paid all white and took the loan from the banks). Thinking about it, most individuals do not do that and use 50 to 60% black. Hence this might be a blessing in disguise and will sustain the real estate market. But after reading your point, I still did not get how you are blaming the feds and P chitamb. for the situation. Sensex at 21K was not because of him but due to his policies (good ones at that) that brought FIIs and FDIs in the country. Now, if FFIIs are pulling out, why is it his fault? Anuj
