Apr 27, 2007

One Trillion Finally

Indian economy hits the one trillion mark finally! Yes that is a huge landmark and how did we get there? Part of it is the searing growth the economy has seen in the last 3-4 years but some of it is also due to the big jump the rupee has had in the last 3-4 weeks. That should do good for our import bill but our exporters are not too happy.

IT Services Biggies have just announced another round of stellar results but the rupee movement must be throwing a spanner in the works. In the long run a strong rupee is good for the economy. IT Service exporters will need to get used (and overcome) the impact of an appreciating rupee and dwindling tax concessions as the Software Technology Park tax holidays come to an end.

4 comments:

Hari said...

Hi Ram,
The Indian economy is tipped to grow at least 6-7% for a few more years and there is a perception that there is a slowdown of the US economy round the corner. Given these, I think you are spot on in saying IT service companies would do good to come to terms with an appreciating Rupee. My layman understanding of economics says that the Rupee is going to grow even stronger in the coming days. How do you think should the service companies adjust their model now?
-Thanks, Hari

Technorabilia said...

Its great to see what some amount of freedom can do ...
Software Industry is one industry that the government did not have its clutches....
Imagine the government dictating the num,ber of exports and then levying various new taxes on these and so on and so forth....
We can become the largent economy provided the politicos dont play business and instead concentrate on reforms...
If services like manufacturing and other areas open up we would definitely sure ahead already many automobile parts manufacturing companies have shown how they can be the best in their business
the opening of telecom sector was also a very good thing these have made INDIA the fastest growing market for cellular handsets and also INDIA provides the cheapest rates in comparison to any other country ... I remember sometime back when the BSNL employees used to come collect chanda and upon nonpayment would wantedly harass the customer....
thank god ....
now a days a complaint would make them rush...
INDIA is now in one of its most tremedous growth period and poised for a lot lot more......
Hope we don't miss the bus....

Technorabilia said...
This comment has been removed by a blog administrator.
Yuva said...

IT still have margins and infact now has expertise. so force & aid has to be directed elsewhere also (since our govt cannot multi-task).

nearly 10-20% contribute & participant almost 70-80% in this trillion economy.. and that's is the issue. if planned properly - we can next japan, south korea if not(danger ) we might become next latam america