Not all is well with India Inc. Several recent media reports clearly point to this situation. Factory output growth fell to 2.7 percent in May, dragged down by manufacturing; business confidence hit a six-year low in June; during last fiscal, cash flow of the country's top 56 companies registered the slowest growth in three years; private sector investment is not picking up; and so on. But amid this pessimism, there is still hope. The economy is under stress, the industry is struggling, but a recovery does not seem far off.

Among the good news is that the monsoon concerns have ebbed. It was widely feared that a sharp shortfall in rain in July and August could adversely affect revenue growth of the industry — consumer price inflation could rear its head again. But fortunately, monsoon has so far been better than expected. More or less, every region has received one or two good wet spells, which is good for kharif cultivation. Until now, insufficient rainfall and its possible effects on yields and prices of food products, particularly oil seeds and pulses has remained a big concern.

Another major concern — the ongoing lull in investment activity — could be addressed, as I mentioned last week, by sparking an investment cycle by public investment. It has been reported that the PMO is trying to arrive at a swift resolution of the hurdles delaying 410-odd stalled investment projects worth Rs 19.5 lakh crore. The effort is praiseworthy. In addition, I think the government could go for borrowing more to revive the investment cycle. This might lead to marginal slipping from the projected fiscal deficit target of 3.9 percent of GDP, but such a move will definitely help the economy in the medium-term.

In the global front, the biggest relief is that the lingering Greece debt crisis has eased. On Monday, the Eurozone leaders reached a "unanimous" agreement, bringing an end to the fear of a possible Grexit and raising hope that investors would no longer hold back investment. Meanwhile, China's stock market crisis, in which ten days of falls resulted in massive losses, seems to be gradually over. The Chinese government has taken a number of measures and succeeded to halt the rout, at least initially, and I think even if the Chinese economy slows down, it could be a blessing for India, leading to more fund flow to the country.

I invite your opinions.