With GDP numbers plunging on one hand and equity markets soaring to new heights on the other, fears are developing over a K-shaped recovery that favours wealthy, with upper fork of letter “K” being the stock market and lower fork is the real economy, and the two being clearly divorced from each other. However, a well-directed financial stimulus can go a long way to change the alphabet of recovery from “K” to “V”. Indian economy is on the verge of the worst economic collapse since the lockdown was announced in late March. More than 75 lakh Indians have caught infection with hundreds of them dying every day. On economic front, GDP numbers are contracting, business activity and corporate profits has been severely squeezed with private consumption and investment still in doldrums. Yet stocks market remains bullish and keeps on climbing up. It seems as equity market is clearly disconnected from the real economy. It was in the month of March when Indian stock market plunged and touched n...
A blog about challenges and opportunities in Indian economy