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  What are Green Shoots
What are Green Shoots?
Green shoots is used to refer to signs which indicate recovery of the economy. It draws on the fact that green shoots which appear above the earth are the first visible signs of growth of a plant. Particularly after a recession, green shoots are welcome as symbols of the fact that the economy is slowly treading the path upward.

In fact, positive economic data and statistics, including recovery of the banks whose failure literally brought on the financial crisis, the consistent rally of stock markets globally, recovery and stabilisation in the prices of commodities like oil and gold and reduction in unemployment among others, have been seen as green shoots.

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Why have green shoots been in news?
The concept of green shoots seems to have received wide-spread popularity after US Federal Reserve Chairman Ben Bernanke spoke of how economic recovery was possible if they succeeded in bringing stability to the financial system. In fact, Bernanke pointed out that he had already begun to see green shoots in some of the markets where the Fed has managed to revive the process of lending as well as a positive change in the condition of some of the key banks. According to Bernanke, the first sign of actual recovery would be “that a large bank is successful in raising private equity.”
However, the term green shoots can be traced even further back to Britain - during the economic crisis in 1991 when the then Chancellor of the Exchequer, Norman Lamont, claimed that he had sighted ‘the green shoots of economic spring’. However, Lamont found himself in trouble as sustained economic growth occurred only at the end of 1992.
In fact, the use of the word green shoots has consistently been met with opposition. Earlier this year, the comments of Lady Vadera, a business minister in the Gordon Brown government, that she saw signs of recovery when large scale job cuts were being announced everyday led to much furore. Lady Vadera, ultimately, had to clarify that she was merely talking about revival in the credit and bond markets.
(updated - 26 July 2009)
Are we seeing green shoots in India?
While there is no consensus on what exactly constitutes green shoots, the improvement in industrial production figures, rise in the car sales, developments in the infrastructure sector, including the steadying of prices of cement and steel, have been seen as green shoots. In fact, the creation of a stable government at the Centre which has the will to make changes has in itself, been seen as a critical step in the direction of recovery.

However, in the recent meeting of Prime Minister Manmohan Singh with the members of the G-8 group of nations, they decided that the appearance of green shoots needed to be treated carefully and should not lead to the immediate revoking of many of the measures that were taken by governments to bolster the recovery of the economy.