Now, A Few Growth Pangs

Suchi Srivastava April 16, 2007 00:00 IST Now, A Few Growth Pangs -0001-11-30T00:00:00+05:53

It's not a black-and-white verdict—yet. There are shades of grey to grapple with. But despite the ongoing growth story, there are increasing apprehensions that the Indian economy could be in trouble in the near future. Suddenly, a combination of macro and micro factors have stymied the bullish sentiments across several asset markets—real estate, stockmarkets, and commodities (like metals). While optimists continue to be vocal about India's potential, the investors are gripped with a sense of fear.

Rising interest rates are a cause for concern. A one per cent hike on retail loans—especially homes and cars—has wreaked havoc in both markets. Inflation continues to be high and consumer prices show no declining signs. There's a feeling that the government may come down more heavily on manufacturers in a bid to control inflation. Both the new interest rate regime and inflation-related policies can hurt corporate earnings in the future quarters. And, banks will be hit by lower credit offtake.

That's why on April 2, the 30-stock...