The signs are all there, but Reserve Bank governor Duvvuri Subbarao is still being cautious about the green shoots of a possible upturn in the economy.
“As the monetary and fiscal stimuli that were introduced by the Reserve Bank and the government work their way through, and if calm and confidence are restored in the global markets, we can see economic turnaround later this year,” he said at a financial management summit on Friday.
“While overall industrial production fell again in March, cement and steel production have shown some preliminary signs of upturn. Segments in the automobile sector, particularly two and three wheelers and passenger cars, are showing modest revival of demand. The industrial and business outlook is improving,” he said.
A lot would depend on the global recovery, and “if global recovery does not take hold by the last quarter of 2009, we would realise that the domestic policy response should have been stronger,” he said.