As I was quoted by mint today, while I do agree that the economy has bottomed out, the government seems to be way ahead of the market again as they expect the economy to grow between 6% - 6.4% during the second half of the current financial year. With the government tomtoming every policy move as reform (of course there have been some positive steps so far) which they believe will impact the economy with immediate effect and deliberately mistaking noise for signal (talking about low inflation and high IP growth), its like happy days are here again.
Unfortunately it is not and people have simply lost trust in government blabbering and considering those as noise rather than reality. I explained here and here why neither the high IP growth nor the low inflation number should be taken on face value. Indeed, one swallow does not a spring make. While the economy has bottomed out, the expectation of a virtual ‘V’ shaped recovery is out of sync with reality. I believe it is more likely to be a ‘U’ shaped recovery.