Economic Growth: No News is Good News

- - Resources

The S&P BSE closed at 0.58 percent—around 143.01 points, at 24,6832.03. The Nifty 50 index closed 0.71 percent or at 53.55 points, lower at 7,510.30, showing zero early gains. Recorded index closing levels of the BSE Sensex has dropped to an all-time low, with figures dropping to the same levels before the new government took over.

Little Growth is Growth

Given the recent drop in India’s Sensex—the country’s benchmark when it comes to equity index—with 143 points and closing at about 2,682.03 points, it might seem that the economy has shown little improvement since Modi’s government was elected to power. Just 19 months ago, when the new government was declared, that announcement was met with happy cheers from investors in the market.

The cheers have long gone now. With reforms and bills still unable to drive and push for economic growth, markets are restless and investors unhappy.


Moderate Economic Pickup

However, analysts are saying that the steady rate means steady economic growth. It’s not spectacular, but when viewed alongside market performance data from neighboring markets, India seems to be in a position to outpace many on the list. In China, for instance, manufacturing activity has reached levels, the lowest in the last six years. As the new year came in, China saw more problems when its currency decreased, with stocks crashing and further damaging the market with its stalled economic growth. In comparison, then, India seems to be doing fairly well, with a solid economic front ripe for investors and businesses. So no change in the last few months isn’t all bad news. It more or less means that things are on an even keel.

Enough Jobs for Everyone

Given the condition of India’s economy, there’s still a huge need for economic growth to happen at a much faster rate. Every year, graduates leave their classrooms to enter the workforce. As more and more graduates join the ranks, there’s a pressing need to make sure there are enough jobs to go around for everyone. Otherwise, unemployment rates could go on the rise.

Investing in the Stock Market

With things keeping steady on the economic front, though, it seems like a good time for investors to invest in stocks. Stocks are on the low and one could scoop them with less money and sit on them until prices rise again. You’ll have to be willing to wait around, of course. But if you can afford to wait things out, you might be in for a nice surprise. However, a word of caution: pickup can be slow and unless you’ve got the resources or time to wait, investing in the stock market might be a better option for another day, at least until economic activity starts to pick up faster. With predictions that growth would be slightly higher in 2016/17, you can look forward to a whole year of reevaluating your options before you put your funds in the stock market.

Want to hear more? Get economy news in Hindi from Money Bhaskar every day.

Engineering student by education and Entrepreneur by choice. Asish is a TCS Best Student Awardee, NDTV featured student entrepreneur and International School of Entrepreneurship Education awardee. He also worked with many startups and big companies for their business development and strategical growth. Asish has been heading The Startup Journal since its inception in 2014.