ITS that phrase again! That f-word once more, back from ignominious exile two years after it skulked away from our vocabulary. Its the "feel-good factor". It swindled us in 94, when foreign institutional investors pumped money into the bourses and Indian industry seemed poised for vertical take-off. What we got instead was a recession as Manmohan Singh squeezed money supply and turned Indian industrys playing surface from astroturf to slush. It hoodwinked us again in 97, when P. Chidambarams tax-slashing budget seemed just the right medicine. But it soon became obvious that his budget was about six years ahead of its time; that though cutting taxes was good, cutting government capital investment given the current structure of the Indian economy was folly.
Is it the real thing this time? We at Outlook, at the risk of having to eat our words some months down the line, have decided to go out on a limb. Yes, its the real thing.
The numbers first.