The answer to that question is an emphatic yes. But, why is this question even cropping up at this juncture? The answer to that lies in the Indian stock market’s major indices, the sensex and nifty coming under major attack fom the bears. The Sensex which gave a whopping 47% return in 2007, touched a very high 20000+ in january,08 and has since then found itself under tremendous pressure from various global factors.The Spiralling crude oil prices, the U.S subprime crisis, fears of the U.S slipping into a recession and to a certain extent the very populist budget have all contributed to the sensex and nifty’s continous slide, the sensex even closing at less than 15000 points, a couple of days back. But, the sensex’s slide has more to do with global factors than the Indian economy which still is very robust in health, and is growing at a frenetic pace.

Analysts have different opinions about the stock markets’ recent downtrend with a majority of them feeling that the Indian growth story is still very much on, with them expecting the agriculture sector, which just got a major fillip in this budget with a huge write-off of farming loans, to do exceptionally well in the next 3-5 years. As a result, the Indian economy which is still reliant on the agriculture sector, naturally will do well. Analysts also feel that the Indian middle class will be encouraged to spend more, since the budget has announced a slew of tax incentives. More consumer spending will automatically see the FMCG and consumer durables sector, which is currently in the midst of a slowdown, perk up adding strength and resilience to the Indian economy. Although, a lone analyst does feel that the capital markets have crashed. The above facts indicate that the Indian long term growth is still on, although we might not see stellar growth rates we were witness to during the last decade in a few sectors like IT and manufacturing.

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Via: moneycontrol