Cleansing downturn

Downturns are painful but are an essential cleansing of capitalism. Our last experience with a full-blown downturn, 1996-97 to 2001-02, gives us insights into how things might play out. In the early 1990s, with the great investment boom, we got buoyant business cycle conditions in India. In the CMIE database, in 1994-95 and 1995-96, profit after tax (PAT) was over 5% of sales for non-financial firms. 

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