The Sensex was down over 515 points today to hit a low for the year – 14571.29.  The reason for the bearish performance was inflation, the gov’t announced inflation was 11.05% a 13 year high mainly on the back of increased gas prices.

But the fun doesn’t stop there, several people I’ve spoken to are putting their India expansion plans on hold because everything is so fu!@#$ expensive. Real estate is the biggest hurdle for most businesses and prices are still sky high and are set for a STEEP fall.  Take a look at some of the real estate stocks – Omaxe, Ansal, Parsvnath, DLF, HDIL, Shobha, Kolte-Patil and Puravankara are all down 60%-80% from their highs.  During the run up in these stocks many people forgot that most real estate transactions in India occur in the black – meaning under the table.  I laughed when the real estate guys started listing b/c it would be like Pablo Escobar listing his drug trade.  Granted your product is good and clients are happy, but they are paying you under the table and last time I checked the Big 4 accounting companies don’t like that.

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