Expect it to be a year of guarded optimism

Economy

What can one say about a city which has grown multifold in the last ten years, surpassing the growth rates of all cities in the state, and indeed most cities in the country and the world? The manufacturing sector has remained robust with over a hundred German companies now headquartered in the city and home-grown majors like Bharat Forge, Tata Motors and Bajaj Auto scaling new heights. The IT sector has galloped from a few hundred crores of exports in 2001 to over Rs 30,000 crore and the city's population has probably grown by at least a million, with students and job seekers thronging for their place under the Pune sun.

In 2012, like everywhere else, Pune too showed economic sluggishness. The leading indicator of growth, the capital goods industry has been on a slow track while the automotive sector has held its own, though not at the scorching pace of growth of earlier years. In IT and BPO, there has been a definite slowing of revenue growth; and fresh employment and the slower rate of increments in this and other sectors have also resulted in lower spending on retail — not a very pretty picture all in all, though the last quarter pickup in the Indian economy does hold out some hope of a near term revival in the fortunes of many firms.

I would expect 2013 to be a year of guarded optimism. Capital investments, at least in the first six months, will be judicious and hiring pickup by summer will be predicated upon a definite revival in the economic fortunes of key sectors. Exporters, depending on the global economy, will be watching America's ride towards the fiscal cliff and Europe's adventures with Greece with considerable trepidation, and domestic manufacturers will look hopefully towards a strong political will and implementation of many announcements that could boost the Indian economy. With the government in more proactive mode since the return of Mr P Chidambaram as Finance Minister, one can expect to see a growth-oriented budget and there are hopes that the Reserve Bank will finally play ball and join hands in the revival of industry fortunes.

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