IT’S that phrase again! That f-word once more, back from ignominious exile two years after it skulked away from our vocabulary. It’s 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 industry’s playing surface from astroturf to slush. It hoodwinked us again in ’97, when P. Chidambaram’s 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, it’s the real thing.
The numbers first.
