India in depth: 'Consumption bets to outperform - consumer goods cos top for investors'
The quality of growth will disappoint because a much-needed pickup in investment is not yet on the horizon.
The credit cycle is still weak; state-owned banks are hobbled by bad loans.
For investors, it means cash-rich consumer goods makers may be superior bets in 2013 than credit-dependent infrastructure and capital goods companies.
Consumption will remain well-supported by strong rural wage growth and government subsidies on food, fuel and fertilizers.
Despite all the talk about the urgency of fiscal consolidation in India, public spending will remain high, as it tends to do in pre-poll years.
And that will put more cash in people's wallets.
Domestic consumption will also get a boost from an improvement in exports.
Global demand conditions will probably not deteriorate any further in 2013, and that will drive a steady recovery in India's manufacturing output, leading to job creation and wage growth.
The surge in industrial production in October is a welcome signal.
Spending power will increase in real terms as inflation stops being as big a drag on consumer sentiment as it has been this year.
The pace of rising prices won't fall as low as 5 percent, but it will decelerate from its current 10 percent - assuming oil prices don't spike.
Fears of a sudden demand collapse in the United States from large, abrupt cuts in government spending and tax increases are keeping oil prices in
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