Where's the innovation?

Swot

 There is an air of perilous expectancy among businessmen and policymakers these days. Corporate results have been better than they have been in some seven years.

 Late last month, a Business Standard Research Bureau study, after examining the Q2 financial results for 462 companies, has predicted that corporate India is likely to post sequential double-digit growth in sales and profits for the first time in recent years.

 The monsoons have been good, the stock markets are booming, forex reserves are heading for the $ 100 billion mark and even the cautious Reserve Bank of India has stuck its neck out and revised its GDP growth projections upwards to as much as 7 per cent this year.

 So why the unstated sense of peril? Much of it has to do with the fact that both businessmen and economists know that India today is far more closely linked to the global economy than ever before. Thus, if foreign institutional investors sneeze, the stock markets will catch pneumonia.

 Should the global backlash against Indian IT professionals strengthen, the BPO fairy-tale could end in a nightmare. If demand in the US and EU drops, Indian manufacturing, still burdened with overcapacity, will suffer.

 For the services sector, perhaps there is less to worry about. Business Standard