The Indian economy is unlikely to see any major revival anytime in the near future, said Vikas Khemani, founder of Carnelian Capital on Monday, adding that credit supply remains to be a big issue for the country,
“Today credit has not picked up in the system, in fact, credit has gone down in the system which has created a very huge cascading effect on the industry and the real economy... that is one of the biggest problems of the Indian economy today and till the time we sort that out, we are unlikely to see any major revival in the economic fortunes anytime in hurry," he said in an interview with CNBC-TV18.
“The way I see it, essentially the economy needs to come out of post-IL&FS credit crisis shock to the economy. We had a massive shock, in some sense, I call it a mini Lehman kind of a shock to the Indian economy," he added.
Speaking about the markets, Khemani said, “We are in a very chaotic market where there are mixed news. There is always news flow like rating downgrades, credit liquidity issue and on the other side... tax collection numbers are going up. So, the investors are in a state of confusion - whether the economy is growing or not growing, whether things are improving or not improving.”
According to Khemani, the Union Budget is the next trigger for the market to react. “We have Budget ahead of us. So, right now markets have a lot of expectations from the Budget. Let us see what comes out in that, but in my opinion, unlikely that it can cheer market for good... unless we see an answer to the credit problem, we are not likely to see that. I feel this quarter earnings could be very disappointing from most of the real sectors,” Khemani added.
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