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Half of the economic recession is in our minds. The problem is: we do not know which half. But if recent news items are an indication, we are probably figuring it out.

The high-profile $1 tn plan in G-20 Summit has instilled a lot of hope among the global economic community. More recently, the Chinese premier is seeing positive changes to his countrys economy. The US president, for the first time since the recession began, is seeing glimmers of hope. At the time of writing, the BSE Sensex is treading at the 11,000 point zone, up from its low of 8,000 a few months back.

All these are, of course, very positive developments.

But hold on. Neither the leaders nor the data on the economy (job losses, industrial output) coming out of major countries suggest in any manner that the situation has started improving.

Right now were still seeing a lot of job losses, a lot of hardships, people finding themselves in some very difficult situations, said President Obama. Few analysts in India are ready to call the recent spurge in Indian stock markets a definite shift from a bearish outlook to a bullish one.

In short, no one is out there saying that the recession has bottomed out.

However, one change has most definitely happened. No one is saying I do not know where my business is going. While the informal discussions are still around the economic slowdown, they are more around the impact, how exactly the business is getting affected, and even some numbers and time of recovery. In short, people have started working on their recession-adjusted business plan. It is no more fear, uncertainty and doubt. The FUD phase is most likely over.

One of the best indications of that is not the statements of world leaders or the performance of stock markets. It is the announcement of layoffs that gives us a better indication of that. Between November to mid-February, there were more than sixty massive layoff plans that were announced. Since then, that figure is less than half a dozen. Of course, many of those announced layoffs are actually being implemented, adding to job loss data. But few fresh layoffs are being announced. The BT and RBS kind of layoff announcements are today exceptions rather than the rule.

In short, it means most businesses have finalized their Plan B and back to doing business.

This is not the same as the end of recession. In fact, let alone the end, we have not yet seen the bottom. But we now know when and how exactly will we reach the bottom. That means two things: one, we can plan more realistically for the period. Two, we can actually start working on the post-recovery strategy.

Well, it sounds simple today. Two months back, there were few who could even dare to discuss anything to do with post-recovery phase.

Let us come back to our original question: how much of it is reality and how much of it is in the minds. Without trying to put a number, I think few will have a quarrel with me if I say that in India (and China), it is a lot more to do with a wait-and-watch than a real slowdown. And if the worst of uncertainty (I must remind again that it is not the worst of recession) is over, it should lead to the end of that wait-and-watch period.

Some of the recent research actually does point to that. In a survey of more than 450 Indian CIOs, IDC (India), suggests that about two-third of them expect that the crisis would be over by the end of the current calendar yearthat is just two quarters away. That may be a little optimistic. But that will mean that they would now take definite steps to work out their growth plans, as most segments are still growing and had stopped spending on IT because of the negative outlook.

That may mean IT may actually lead recovery in India.

Shyamanuja Das

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