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India’s Shrinking Business Cycle


If ywealthymatters.comou have a ladder of fixed income instruments  or are looking to take on debt,it helps to be able to have a feel for the interest rate cycle.I came across come interesting inputs to help in this effort in yesterday’s newspaper.

The chief takeaways of this article are:

1.By watching the long-term investments in infrastructure,maybe 10-15 years into the future,we can call the GDP growth rate.At present it is  likely to be 5-7 %.

2.The current RBI governor has commented that the potential growth output frontier has shrunk to about 7.5%.

3.During the growth phase of the business cycle,when the growth reaches,85% of the capacity,which is about 6.5% growth,RBI will likely apply the brakes.

4..The business cycle time period has reduced from a previous  7-8 years to 1.5-2 years.

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About Keerthika Singaravel
Engineer,Investor,Businessperson

2 Responses to India’s Shrinking Business Cycle

  1. Alex Jones says:

    Interesting, we live in an unusual economic climate at the moment, so I wonder if the old rules will apply to what will be happening over the next few years.

    • My personal take is that modifications of the old will continue till such time as there is a complete breakdown.Unfortunately I just don’t know the time and place of this event,just that in a digitally interconnected world it is likely to happen in the blink of an eye which may not give us much time to react to save ourselves.

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