Last June, I got a freak call from a young IT professional working in a large Indian IT firm. He was an engineer from IIT and an MBA holder, too--the best in education that you can ask for. He told me he wanted to be a freelance journalist like me and wanted me to guide him. I was amazed when I heard that. At first, I dissuaded him...the profession does not pay that well, after all.
But my dissuasion did not work. He was still keen on becoming a freelancer. I probed him a bit, till he finally told me the real reason. There was not enough work at this company. And he spent most of his time "on the bench". Though I haven't received another call like that since then, I assume there would be more young men and women like him today--on the look out for greener pastures.
The newspapers only reaffirm the sordid story. Over the last two months, there have been news reports about companies like Fidelity, Yahoo, IBM and TCS weeding out non-performers from its rolls in India. Globally, most tech firms are busy downsizing and there are fears over a fallout on their Indian operations.
Yesterday, the IMF (International Monetary Fund), too, admitted the U.S. economy may be unable to escape recession from a housing meltdown which effects are still spreading. According to the IMF: "The U.S. economy, the world's biggest, is likely in a 'mild recession' and will stagnate through much of 2009 as housing prices slide further and credit conditions remain difficult."
For the world economy, there is a 25 percent chance of dropping below 3 percent growth in 2008 and 2009, the IMF said.
The IMF has estimated the impact of global financial turmoil following U.S. sub-prime crisis at US$1 trillion.
If a recession is indeed declared, this would be the American economy's 11th recession since World War II and this millennium's second.
What does that mean for India? According to the IMF, the impact of the U.S. slowdown will be less in the case of emerging economies in the East (read: India, China) as compared to developed nations.
The United States saw one of its biggest recessions in 2001, ending ten years of growth. But post-recession, India saw one of its most spectacular periods of growth.
The IMF has projected that the Indian economic growth rate would slip to 7.9 percent in 2008, from 9.2 percent in 2007. In 2009, the Indian economy will expand at a slightly higher rate of 8 percent, the IMF's World Economic Outlook said.
Well, 7.9 percent is still an impressive growth rate. There may be fewer "benchers" at Indian IT firms today and many more who may be living in fear, but there are too many positives that we can't overlook. And, though this may sound patriotic, I think we shouldn't doubt the India growth story.