2008 was an eventful year for India in several ways. Inflation reared its ugly head early on and prices of commodities, food items and fuel went soaring up. Later on, the global economic crisis had its impact with FIIs pulling out money from the stock market. Newspapers reported various incidents of middle class families which had lost money in the stock market and now were facing the prospect of poverty. The global meltdown has had its impact on India’s richest: India’s 40 richest people’s net worth has shrunk from $351 billion a year ago to $139 billion. Property prices began to tumble. The daily news about globally iconic companies now begging for government handouts and numerous announcements of layoffs have created an atmosphere of ambiguity. Several Indian companies announced layoffs, salary cutbacks and freezes on hiring. India witnessed many more acts of terrorism across its cities – Delhi, Mumbai, Jaipur, Guwahati, Ahmedabad…with the siege of Bombay being the latest and in many ways the most frightening.
If we examine the larger picture, India and Indian companies are probably reacting in a sharperthan- required manner. The expected GDP growth is still 7%, not a mean rate of growth for such a large economy. The number of people actually laid off in India is miniscule. While it is true that the manufacturing sector has slowed down, many sectors have shown phenomenal growth. The FMCG sector is one such, while according to a source at a leading kitchen appliances MNC, the durables sector too has shown fast growth. The bulk of people in India are self-employed, with the number of people working in the organised sector at barely 2% of the total workforce. Similarly, the involvement of Indian consumers with the stock market is less than 5%, with the majority of people still relying on traditional financial instruments like fixed deposits and bonds. However, the prevailing sentiment amongst the middle class is that of uncertainty and fear. Mindscape, Technopak’s consumer – based consulting arm, did some brainstorming and consumer interviews to come up with 9 key behavioural trends for 2009.
