India’s economy hits economic regression

"The best minds are not in government. If any were, business would steal them away." Ronald Reagan
The AESC conducted a mid-year Outlook Report which conveyed the results that executives in India were optimistic as a whole about the Search Industry. However, Search Professionals in India have suggested that whilst the situation in India currently looks bleak, the difficulty for the Search profession may not improve unless the Indian Government implements drastic changes, and implements these changes quickly.

The Economist suggests, "Inida is going through one of its occasional spasms of talk about reform… P. Chidambaram, the new (and former) finance minister, on the occasion of his retaking the office, on August 6th. He promised to narrow the central-government budget deficit, which is running at just over 5% of GDP. He said he would review plans drawn up by his predecessor in the 2012 budget for retrospective taxes, which had spooked investors." The Economist

Interestingly, India’s economy has hit economic regression, after a long spell of economic growth. Search professionals have commented that the Search Market in India is depressed and that the retained search industry has become progressively tough. The Indian government has begun to backdate taxes for foreign businesses who have entered the Indian market, causing many foreign companies to exit India. Subsequently the Rupee has fallen against the Dollar, slowing business, and making international trade less viable. Equally interest rates are high in India at the moment, and companies are being squeezed from every angle.

Moreover, the current business climate in India means that executives are apprehensive about leaving current positions and equally companies are apprehensive about opening up new positions, creating a knock on effect in the search industry, with no one wanting to take any risks. However, speculation over the next election in India, which will be held in 2014, suggests that improvements could be seen on the lead up to this, or more likely after this period.

This article was written by Helen Langley of the Association of Executive Search Consultants (AESC).

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