Is Indian economy out of the woods?

That's the question which is being asked day in and day out. Here are my views on how to look at it.

Going by the Q1 results of most of the corporates, the general impression is that we are on the growth track. But looking at these performances closely may lead to a different view. Let us take Banks, the main reason for the jump in the profits is due to the decrease in the interest rates leading to an increase in the value of investments. Well is this there core activity?No. So is there an increase in the lending activity? There doesn't seem so. So, in a market where the interest rates are low, but not much of a credit activity does not seem to be a positive development. And the banks are supposed to be the barometer for any country's economy.

The next issue. What people are ignoring for the time being is the performance of the monsoons. The point that is put forward is that the monsoon is catching up the shortfall is being filled up but partially. But is that a good sign. the sowing of seeds happens in the month of June in most of the states. If these seeds don't get water, they burn out. So does the monsoon arriving in late of July really help the farmers? I feel this year there will be scarcity of agricultural products. Whether this scarcity has been discounted by the markets, i doubt.

Thirdly, India for what all we say is still linked to the global markets. And there for the time being everything seems to be quite. As in the case of mkts, where India started correcting much after it had started in USA, similarly the recovery may be lagged one. What growth is now seen in the market is more due to internal demand in the country.