Hi

In chennai the prices of plots or even a flat for that matter is going beyond the reach of a common man. Is there any chance for the prices to correct in near future?

With a salary of 15k, it is beyond the capacity of common man to buy a house or flat
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  • Bigbear, Wiseman, Economist

    If the income levels rise, then unaffordable prices might become affordable suddenly.

    Will the rise in stock prices and successful IPOs we are seeing in recent times make the companies to raise the salaries of employees.
    CommentQuote



  • Timing is the key in any investment if you get your timing wrong and buy at the peak of bubble sure you will lose your shirt and financial advisors will not be around to rescue you.They will be busy counting the commision.
    ------------------------------------------------------------------------------------------------
    Timing the market is not possible.IF it was possible every one will be a millionaire.
    Markets will never go up over 5% or down below 5% every every one can time.

    The fact is:

    When things go up we are greedy and hold on for more gain and downturn set in - Seller has missed good time to sell.

    When things go down Buyers wait and wait for more discount by the time the upturn sets in and the buyer has missed good buying opportunities.
    ------------------------------------------------------------------------------------------------
    Timing the market is not possible.IF it was possible every one will be a millionaire.
    Markets will never go up over 5% or down below 5% every every one can time.

    The fact is:

    When things go up we are greedy and hold on for more gain and downturn set in - Seller has missed good time to sell.

    When things go down Buyers wait and wait for more discount by the time the upturn sets in and the buyer has missed good buying opportunities.
    ------------------------------------------------------------------------------------------------
    Timing the market is not possible.IF it was possible every one will be a millionaire.
    Markets will never go up over 5% or down below 5% every every one can time.

    The fact is:

    When things go up we are greedy and hold on for more gain and downturn set in - Seller has missed good time to sell.

    When things go down Buyers wait and wait for more discount by the time the upturn sets in and the buyer has missed good buying opportunities.
    CommentQuote
  • All shadow-boxing and window-dressing ...

    Originally Posted by contra
    Bigbear, Wiseman, Economist

    If the income levels rise, then unaffordable prices might become affordable suddenly.

    Will the rise in stock prices and successful IPOs we are seeing in recent times make the companies to raise the salaries of employees.



    Contra,

    In a world thrashed by the Bear last nearly 2 years, there is a desperate urge to take any small positive news and spin it into something big, so that people can remain in that pre-2008 boom comfort zone or go back to it!

    While nothing ever goes straight down to zero and only does so in waves, so also with our markets. Since you mentioned IPOs and salaries, let me provide more information about these 2 so we can get the correct perpective ...

    *******************
    "Real estate could be the lynchpin for the equity markets and a failure of a large initial public offering could start a correction in the market."

    Cut back to late 2007/early 2008 and one can recall large real estate players seeking billions of rupees from the IPO markets on the basis of the valuation of their 'land banks'. Ignorant investors were cajoled into subscribing to these issues on the hopes of supernormal listing gains. Many investors fell into the trap without a careful analysis of their leveraged balance sheets. However, by late 2008, most of these real estate players were struggling to carry the weight of their debt and all the euphoria around their land banks had fizzled out. But as they say - Old habits die hard!

    Real estate companies are back at it again seeking billions from the IPO markets, hoping that investors have a short memory. Thanks to veterans like Mr. Parekh, you can get to see the 'real' picture!


    Indeed, if greedy real estate developers, instead of getting punished for their misdemeanors, are being rescued by banks, they will not change their stripes in a hurry. And they are back to doing what they do best, bid up home prices.
    *******************

    Check out the graph I'm attaching which provides 2009 Vs 2008 P/E ratios to give a real view about where we stand today in terms of any real imprivement in corporate performance. Look closely at RE. Current P/Es are at 38 times and are pricing the market beyond perfection!!!

    In fact, going by this chart, any Sep result below ahready high expectations will see the market take the stock to task. Check out Reliance today. After all the media bytes about "What a surprise!" and so on, the stock went up precisely by the amount of the Dividend declared. Shows me that the bulls and bears are currently evenly matched in motivation. Any shortfall in results will see the bulls give way.

    So watch the RE FPO market carefully. This is the current feel in the market among potential buyers and this does not bode well for builders who think they can act unilaterally!!!

    Whenever someone comes to me and says salaries are increasing, I tell to them to check 2 things. The longevity of the hike (for how long will you keep getting it) and what proportion of the populaton is getting it.

    Third, of course is the difference between actually seeing the raise in your payslip as against media speculation. When we have these pieces of data, we will see real increase in spendable surplus. In my opinion, there is a shift among general population towards risk-averseness and therefore savings will keep increasing and unnecessary spending less. This may rven compensate for the increase in salaries wherever they may happen.

    Rest assured. RE is not running away anywhere in the near future ...

    cheers
    Attachments:
    CommentQuote

  • Housing demand to rise by up to 30% in next three months.
    (Economic times of India - today)
    Housing demand, which has been hit by the economic slowdown, is expected to rise up to 30 per cent by the end of this year with maximum demand being seen in the price bracket of Rs 5-25 lakh, says a Ficci survey.

    "Affordable housing seems to be flavour of the day. Not just among the political class, but among the real players at the ground," Ficci said in a statement.

    "Although the real estate sector has started to show signs of revival a majority of the industry experts expect the residential segment to recover by the end of 2009 with a 25-30 per cent renewal in demand," the survey said.

    The survey found out that 34 per cent of the demand in the residential segment was in the price range of Rs 5-15 lakh and 26 per cent was in the bracket of Rs 15-25 lakh.

    As much as 22 per cent demand is in the range of Rs 25-40 lakh, 12 per cent in the range of Rs 35-50 lakh and a mere six per cent for properties priced above Rs 50 lakh, the study revealed.

    "Parking ="http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Housing-demand-to-rise-by-up-to-30-in-next-three-months/articleshow/5102981.cms"] funds in affordable housing projects has emerged as the safest bet for the developers followed by developing demand based commercial spaces," it said.

    According to the survey, industry experts believe that demand in retail segment would rise by 10-12 per cent during the next three months and will recover only by the last quarter of 2010. The commercial segment is expected to pick up after the third quarter of 2010.
    CommentQuote
  • Residential realty prices moving up

    Residential realty prices moving up

    9 Oct 2009, 0740 hrs IST, Prabhakar Sinha, TNN

    ="http://economictimes.indiatimes.com/articleshow/5104433.cms?prtpage=1"]Print ="javascript:openWindowmail1('/mail/5104433.cms',465,475);"]EMail Discuss ="javascript:void(0)"]Share ="javascript:showdivlayer(5104433,'topdiv');"]Save ="http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Residential-realty-prices-moving-up/articleshow/5104433.cms#write"]CommentText:
    NEW DELHI: Residential real estate prices are going up. In the last three months, prices of affordable apartments have appreciated by around 10% ="javascript:openslideshow('/slideshow/5104441.cms')"] ="javascript:openslideshow('/slideshow/5104441.cms')"]

    ="http://economictimes.indiatimes.com/articleshowpics/4568937.cms"]Greatest ceilings
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    ="http://economictimes.indiatimes.com/articleshowpics/4626162.cms"]Most expensive office locations
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    across the country.

    "With improvement in the sentiment in the economy, ="http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Residential-realty-prices-moving-up/articleshow/5104433.cms#"]transactions in the affordable range of residential real estate have gone up. This has made developers to increase prices by 5% to 10% in the last three months," said Anshuman Magazine, MD of real estate consultancy firm CB Richard Ellis, South Asia.

    The developers had cut prices by around 30% in first two quarters of calendar 2009 to revive the demand of residential units, which plummeted to a low due to the global ="http://economictimes.indiatimes.com/markets/real-estate/realty-trends/Residential-realty-prices-moving-up/articleshow/5104433.cms#"]financial crisis. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.. Magazine said the price cut led to some recovery in demand. Enthused by the partial recovery , he said, the developers, who had sold a substantial portion of their projects at hugely discounted prices, decided to increase them marginally in the next phase.

    According to a IIFL report, in Mumbai, prices are up 25%-40 % from the bottom in early 2009, while in NCR, the corresponding figure is 15-20 %. ‘‘ Constrained supply and a revival in demand drove up prices in Mumbai, and NCR," the report said.
    CommentQuote
  • Originally Posted by wiseman
    Contra,

    In a world thrashed by the Bear last nearly 2 years, there is a desperate urge to take any small positive news and spin it into something big, so that people can remain in that pre-2008 boom comfort zone or go back to it!

    While nothing ever goes straight down to zero and only does so in waves, so also with our markets. Since you mentioned IPOs and salaries, let me provide more information about these 2 so we can get the correct perpective ...

    *******************
    "Real estate could be the lynchpin for the equity markets and a failure of a large initial public offering could start a correction in the market."

    Cut back to late 2007/early 2008 and one can recall large real estate players seeking billions of rupees from the IPO markets on the basis of the valuation of their 'land banks'. Ignorant investors were cajoled into subscribing to these issues on the hopes of supernormal listing gains. Many investors fell into the trap without a careful analysis of their leveraged balance sheets. However, by late 2008, most of these real estate players were struggling to carry the weight of their debt and all the euphoria around their land banks had fizzled out. But as they say - Old habits die hard!

    Real estate companies are back at it again seeking billions from the IPO markets, hoping that investors have a short memory. Thanks to veterans like Mr. Parekh, you can get to see the 'real' picture!

    Indeed, if greedy real estate developers, instead of getting punished for their misdemeanors, are being rescued by banks, they will not change their stripes in a hurry. And they are back to doing what they do best, bid up home prices.
    *******************

    Check out the graph I'm attaching which provides 2009 Vs 2008 P/E ratios to give a real view about where we stand today in terms of any real imprivement in corporate performance. Look closely at RE. Current P/Es are at 38 times and are pricing the market beyond perfection!!!

    In fact, going by this chart, any Sep result below ahready high expectations will see the market take the stock to task. Check out Reliance today. After all the media bytes about "What a surprise!" and so on, the stock went up precisely by the amount of the Dividend declared. Shows me that the bulls and bears are currently evenly matched in motivation. Any shortfall in results will see the bulls give way.

    So watch the RE FPO market carefully. This is the current feel in the market among potential buyers and this does not bode well for builders who think they can act unilaterally!!!

    Whenever someone comes to me and says salaries are increasing, I tell to them to check 2 things. The longevity of the hike (for how long will you keep getting it) and what proportion of the populaton is getting it.

    Third, of course is the difference between actually seeing the raise in your payslip as against media speculation. When we have these pieces of data, we will see real increase in spendable surplus. In my opinion, there is a shift among general population towards risk-averseness and therefore savings will keep increasing and unnecessary spending less. This may rven compensate for the increase in salaries wherever they may happen.

    Rest assured. RE is not running away anywhere in the near future ...

    cheers

    Usually all business channels or newspapers write about mumbai,ncr and bangalore re and this should not be confused with chennai markets.They say prices are raising after falling 20-30% and in Chennai have we seen 30% fall?Then where is the question of price increase.
    CommentQuote
  • Originally Posted by wiseman
    Is this not timing the market and by the way is chennai RE a depressed asset now.Dont contradict yourself.

    Timing is the key in any investment if you get your timing wrong and buy at the peak of bubble sure you will lose your shirt and financial advisors will not be around to rescue you.They will be busy counting the commision.



    Contra, Economist, BigBear,

    Here is an article in EcoTimes today that gives some data that so many of us are seeking to get a grip on the situation...
    Homes still out of reach, price fall a mirage

    ]http://economictimes.indiatimes.com/markets/real-estate/news-/Buyers-realise-homes-still-out-of-reach/articleshow/5095684.cms

    As the article says, North Chennai registrations are still at 19834 down from 39331 in the same period last year, which is almost a 50% decline from an already low base of 2008 figures (I bet 2007 was way higher than 2008 data!!!).

    And builders are raising prices on the basis of feel-good data and the enormous pressure due to their debt and necessity to sell their existing inventory.

    Please note that their debt levels are geared for much higher sales levels as well as much higher price/profit levels and current registration levels show that this is not happening. By raising prices prematurely and trying to pressurise people into buying at higher prices or opt out builders are playing a high-stakes game of who-blinks-first.

    BigBear, my own feeling is that, given the current turn towards safety and increasing risk averseness amongst people, many will walk away from higher prices and post-Diwali, builders will be the first to blink! :D

    Btw, in my opinion, Chennai prices are still well in bubble mode and need to come down significantly (when is anybody's guess) before volumes pick up. And without volumes, its coma or death for the builders!!!

    cheers
    Nowadays I dont believe economic times articles on RE (even if it is a bearish article).These guys write without doing any proper research and one day they will say price is increasing and another day they will say prices are falling.:(
    Nowadays I dont believe economic times articles on RE (even if it is a bearish article).These guys write without doing any proper research and one day they will say price is increasing and another day they will say prices are falling.:(
    Nowadays I dont believe economic times articles on RE (even if it is a bearish article).These guys write without doing any proper research and one day they will say price is increasing and another day they will say prices are falling.:(
    CommentQuote
  • Very nice article BigBear. If this is true wouldn't all these debt show up in RE developers balance sheet?

    I am not good at finance, one thing that I notice in this forum is, all the bears have facts and logic to back up their argument, and the bulls have sentiments and surveys.

    While it is anybody's guess which one to believe, after reading this article, I am thinking that the government can use crooked ways to burst any logic and fact.

    Btw, I am one of the culprits funding the banks with FD :-(
    CommentQuote
  • In Economic times which is a heavily advertising and marketing driven entity, there is a lot of pressure on writers to give sensational titles to each article. Their marketing mantra is if the article has a sensational title it will attract a lot of pageviews and ad clicks.

    So better to avoid such newspaper which don't give exact facts but only want your pageview and ad clicks.

    Hindu Business Line is my choice as they are more conservative in outlook and give correct facts.

    Even Livemint is good.
    CommentQuote
  • Affordable houses provide Rs 5,00,000 crore business opportunity. (Todays news)


    The affordable housing segment will offer business opportunities worth over Rs 5,00,000 crore (Rs 5 trillion) as India requires more than ten million houses to be built by 2013.

    According to a report prepared by property consultant Knight Frank on Public-Private-Partnership model on housing in India, an estimated 11.84 million dwelling units are required to be built in India by the end of 2013 across all income segments in 37 cities.

    Commenting on the potential of the segment, the report said though the margins realised from affordable homes are comparatively lesser, the segment offers an opportunity to exploit volume of transactions to derive higher profits.
    CommentQuote
  • Housing demand to rise by up to 30% in next three months.

    (Economic times of India – 07/10/09)
    Housing demand, which has been hit by the economic slowdown, is expected to rise up to 30 per cent by the end of this year with maximum demand being seen in the price bracket of Rs 5-25 lakh, says a Ficci survey.

    "Affordable housing seems to be flavour of the day. Not just among the political class, but among the real players at the ground," Ficci said in a statement.

    "Although the real estate sector has started to show signs of revival a majority of the industry experts expect the residential segment to recover by the end of 2009 with a 25-30 per cent renewal in demand," the survey said.

    The survey found out that 34 per cent of the demand in the residential segment was in the price range of Rs 5-15 lakh and 26 per cent was in the bracket of Rs 15-25 lakh.

    As much as 22 per cent demand is in the range of Rs 25-40 lakh, 12 per cent in the range of Rs 35-50 lakh and a mere six per cent for properties priced above Rs 50 lakh, the study revealed.

    funds in affordable housing projects has emerged as the safest bet for the developers followed by developing demand based commercial spaces," it said.

    According to the survey, industry experts believe that demand in retail segment would rise by 10-12 per cent during the next three months and will recover only by the last quarter of 2010. The commercial segment is expected to pick up after the third quarter of 2010.
    CommentQuote
  • Wealth creator’s dont need to worry about paying 10% more or 10% less as they are investing for a long term.

    Indian inflation and population growth coupled with economic growth will reward such investors/wealth creators with capital growth of many folds.

    Instead of trying to time the market/outsmart the market choose a good property in good location and take the plunge.

    The risk trying to out smarting the market means missing opportunities and risking priced out of property market for ever.

    I know people who have been waiting for BIG correction since 2005 – property market will always look overpriced.

    Wait, wait and keep waiting all your life if you want.

    Once again “Wealth creator’s dont worry about paying 10% more or 10% less as they are investing for a long term” and will certainly be rewarded.
    CommentQuote
  • Investing on time

    Originally Posted by Economist
    Wealth creator’s dont need to worry about paying 10% more or 10% less as they are investing for a long term.

    Indian inflation and population growth coupled with economic growth will reward such investors/wealth creators with capital growth of many folds.

    Instead of trying to time the market/outsmart the market choose a good property in good location and take the plunge.

    The risk trying to out smarting the market means missing opportunities and risking priced out of property market for ever.

    I know people who have been waiting for BIG correction since 2005 – property market will always look overpriced.

    Wait, wait and keep waiting all your life if you want.

    Once again “Wealth creator’s dont worry about paying 10% more or 10% less as they are investing for a long term” and will certainly be rewarded.

    It is very advisable and critical for the right timing for an investment. Eventhough the property value might catch up looking over a few years why must someone venture when the property / land prices at peak. People need to be sure if people are buying in a climb up economy or climb down economy.
    As such it look clearly it is a climb down economy and all the estate agents are trying to paint a picture that the worst is over when the worst is yet to come.
    Only time will say who is wise
    CommentQuote
  • Salaries of employees expected to rise 11% next year (Economic times - Today)


    Indian companies are projected to reward employees with an average pay hike of 10.9% next year, a survey has found, marking the return of double-digit salary increases and optimism about the future.


    The survey by Mercer also shows that companies are restarting hiring after a year which saw most them trim workforce levels to cut costs and compete.

    Industry estimates show that in 2008, salaries rose by an average 8-9%. In 2007 and by about 13% in 2007. Indian companies are expected to give salary hikes at an average of 8% this year, according to Mercer.

    India’s economy grew by 6.7% in 2008-09 after three years of expanding by about 9%. The Planning Commission expects GDP to expand by 6.3% in the fiscal to March 2010.

    The first in a series of quarterly surveys, Mercer covered 93 companies, one-fourth of them from the IT & telecom sectors, 16% from the pharma industry and 14% from the consumer segment.

    Employees in the auto, pharma and consumer products sectors can expected pay hikes of 12% while those in IT & telecom and financial services are likely to see their salaries rise by an average 10-11% in 2010. This year, these sectors had rewarded staff with pay hikes ranging from 5% to 9%.

    “The IT sector is showing improved sentiment with salary increases expected to leap by a few percentage points next year after a long-lasting lull of near 0% increase this year,” said Gangapriya Chakraverti, Mercer India’s leader for the information product solutions.

    Companies in the auto and auto parts sector are expected to offer a 12% salary increase next year and end the current year with an average 9% pay hike. The sector has been on an upswing with robust demand from the domestic market.

    One in two companies indicated an intent to hire to add to the headcount in the next three months.

    “Most companies presented a more optimistic picture on workforce and compensation, with 50% of our respondents expected to hire in the next three months either to add headcount or to replace for attrition so far,” said Ms Chakraverti.
    CommentQuote
  • Economy is rocking – ET News today

    NEW DELHI: Industrial production posted its best growth in almost two years in August, bringing cheer to markets and policymakers and prompted economists to look at bumping up growth forecasts for the year.

    Data released by the government on Monday showed that industrial output as measured by the index of industrial production (IIP) grew by a better-than-expected 10.4% in August, sharply higher than the 7.2% growth seen in July and soundly beating expectations of 9% growth.

    "We are hoping that when the final GDP figure for the second quarter will be available, there will be some higher growth," Finance Minister Pranab Mukherjee said in New Delhi. The government's present forecast is for gross domestic product growing by more than 6% in the current financial year. GDP grew by 6.7% last year.

    A snap poll of 10 economists carried out by ET saw many of them talk about an upward revision to growth forecasts for 2009-10 by at least half a percentage point.


    CommentQuote