The challenges before Indian retailing in the past year have been unprecedented in both scale and scope, with a number of factors derailing the projected growth in the sector. After many years of double-digit increase in rvenues and general optimism for the future, the events of last year have really tested the mettle and skills of the retail industry.

In India, not only did we have to face the effects of the global recession, but also the deteriorating security scenario. True, the effect of the recession has not been as severe as it has been in certain parts of the world, like the US and Europe, where the closure of the banking institutions has affected all sectors. But, as the world economy integrates and becomes more interdependent, seismic eruptions in one part of the world, especially the developed one, end up causing tremors globally.

Negative Sentiment
To a lesser extent, the 26/11 terrorist attacks in Mumbai also created a negative sentiment, especially due to its extensive coverage by the print and electronic media. The live world telecast of the images of a city under siege for almost 72 hours had its own impact.

The slowdown in the Indian economy has been real and can be gauged from various indicators like the fall in GDP growth, thankfully not precipitous, from 8-9 percent to 6.5 percent, slow disbursement of housing loans, and the drop in like-for-like sales of retail formats. But, with the people of India giving one party a decisive mandate in the national elections, the stable polity coupled with the freedom to push reforms is anticipated to hasten the process of recovery.

Internationally, the doom and gloom that pervaded the markets is surely lifting, and the same is happening here - one will just have to wait and see how fast the winds of positivism and recovery dispel this air of despondency. It is my estimate that the coming third quarter leading to the festive season should see positive growth, which would further accelerate across all industries in 2010.