Infosys was growing 100% every quarter and so was almost every other Indian IT major. Ah, those were the golden days of IT. Everyone was bullish about India and especially the IT sector. Everything was hunky dory. I was lucky enough to squeeze into Infosys in October 2000. And then in a flash, it was all over.
First, the dot-com bubble burst and NASDAQ crashed in 2000. The Bombay sensex fell from its heady 5300 levels to the 3500 levels. Then came the death blow in 2001. The twin towers came crashing down and so did the world economy. IT in India, which was majorly driven by US demand took a huge hit. The Sensex was probably doing 2500 levels by late 2001. What a fall it was!
Small time players shut shop and laid off people. Bigger companies stopped recruiting. They couldn't lay off people coz it would hurt their image. With their solid cash base, I guess they could maintain an employee base of close to 10,000 over a short term. I languished on 'bench' for ten months before I got into a live project. I still remember my 'bench' days with pain - the frustration, the hopelessness.
Fast forward to 2006. As my MBA program enters its last phase, I observe the Indian economy in general and one industry in particular. The Indian economy seems to be on a roll, growing at 7% every year. The stock markets are at historic high levels with the BSE Sensex at 12,000 odd. IT companies are upbeat and I see an article on rediff that says techies are having a ball in India. Every Indian IT major needs 25,000 people per year. Salaries have gone up 14% on average. Everything seems hunky dory again, and that is what worries me! :(
Is India such a good bet - Even when the morons in power think reservation in private sector is a good idea? Aren't wage hikes eating into India's competitive advantage - 'low cost talent'? Does anyone really believe that those astronomical real estate prices in Indian cities are justified, given the dismal state of infrastructure? When I look at all this, I cant help but look back at 2000 and ask myself "How long will this last?"
A selfish human that I am, I ask myself "Will this dream run hold until I complete my MBA? Can I get lucky once again and manage to sqeeze in just before the gates close? And how many months will I languish on bench this time around? Or is it too optimistic on my behalf to hope for bench time? With 60,000 people on their rolls, can the companies afford not to lay off people this time around, image or no image?" Only time will tell. Call me pessimistic, but I dont feel too comfortable with this dizzy growth.
(Picture Courtesy: Yahoo!News and Analisi Tecnica Online)
3 comments:
Another viewpoint is that any economy/industry goes thru an up-down cycle, periodically. So its not surprising that this bubble will burst some time sooner or later. The idea is to benefit as much as possible from the current upswing.
We all know that its not a question of if but when. I wonder if this run will hold until this year end. Great if it does... just my feeling - I doubt that it might not.
Well...yeah i kinda get where ur fears come from. Had it just been attributable to the performance of the indian stocks, yeah I wouldnt have thought the markets will crash. Especially since the thing just went through a 800 point correction 2 weeks back. Actually the graph which u put up is also a brilliant indicator of the step level progression normally taken by the market. The problem only starts coming in when u read bout the 'May day". Folks all over are betting big on selling everything this month on US stocks and waiting for them to crash thru the year. Try reading about it. Its such a troublesome issue that Im wondering whether they will have jobs by the time I pass out... :P
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