Last night I was a part of Bloomberg Next at Four Seasons Mumbai Worli organised by Bloomberg. The theme was based on emerging markets serve as the world’s economic growth engine amidst the global turbulence. The distinguish speaker was the CIO one of the leading mutual funds share his thoughts on the topic India beyond silk and spice. I was surprised to see every body has gone so negative these days on the India growth story and INR dismal performance continuously to free fall. The INR is having a free fall these days and it was trading at $-INR 54.74 making another record. The marketer puts in Indian Rupee falls to fresh record low for third straight day on risk aversion where as our politicians as usual blames Greece for fall in INR.Getting back on the topic it was more like a comparison between India and China. Certainly there where some bullet points which where in favor of India and against India it was clear in thoughts that the pessimism has grown up in the financial Industry credit goes to politicians but that’s the way India work. I would like to mention another asian nation Vietnam who can take over India on commodities .
One of the punch line is very clear, growth of Chinese economy is determined by their political will to grow where as growth of Indian economy lies on the destiny to grow. Credit goes to the politicians.
India has never seen any major reforms excepting the 1991 era where govt was having no option and they pushed to bring the reform and other period was in 2003-04 for a very short-term . So it is very clear no government has the will to do reforms it has always been the industry who find the way in the fiscal policies and grow their business when ever a window of opportunity provided to them.
The bureaucracy and scandals in the last 5 years has dented India’s image and now we have a tag of deficit in each segments Current account, Fiscal, foreign investor confidence. It is easy to blame than act but that’s the harsh truth India did missed the opportunity even though the western world where not doing well. Even the world is in gloom loom but the domestic consumption of India has not gone down, the malls are full on weekends, retail, hospitals, education , real estate, infra remain intact and likely the demand will rise more.
I have the intuition that something got to give sooner rather than later. The Indian reforms history proves that whenever India got in trouble there is an automatic push in the kind of reforms happened and the economy has out-performed.