"India shining". This used to be the title of most presentations made by business houses and financial institutions. Everyone used the phrase to showcase the positives of investing and doing business in India. And we are not referring to something that is ancient history. This phrase signified India just a few years ago. In the year 2009, India was ranked at 49th place by the World Economic Forum in its Global Competitiveness Report.
But just 3 years on, things have changed. India has now slipped to the 59th position. The reason - poor governance and policy paralysis. The hoards of scams and negative reports have hurt the global picture of the country. At the same time the policy paralysis that seems to have a firm hold on the economy, has hurt the business sentiments. To add to this is the 'business cost of terrorism' due to the security risk. The only thing that seems to have come to India's saving is its sophisticated financial markets. If not for that, India's ranking would have been even lower.
Ignore economists. Ignore the central bank. Ignore rating agencies. But how long will the Indian government manage to ignore every finger being pointed at the messy state of affairs? Steep inflation, current account deficit, fiscal deficit are just a few of the macro economic factors haunting India for long. But there are some grave ones like the debt to GDP ratio in India exceeding 90%.
Undoubtedly with policy logjam and shortage of critical resources, it is rather difficult to buy into 'India story'. Especially if someone is hoping for a quick turnaround in the situation. We are therefore least surprised by the comments of Jim Rogers. In an interview to Business Standard, the well known investor has said that he is no longer "a fan of India". In fact that he is also short on India.
We do not blame him for the pessimistic view as anyone looking for short term gains from India is bound to be disappointed. All that we hope for is that the government should not spoil India's long term prospects completely.
But just 3 years on, things have changed. India has now slipped to the 59th position. The reason - poor governance and policy paralysis. The hoards of scams and negative reports have hurt the global picture of the country. At the same time the policy paralysis that seems to have a firm hold on the economy, has hurt the business sentiments. To add to this is the 'business cost of terrorism' due to the security risk. The only thing that seems to have come to India's saving is its sophisticated financial markets. If not for that, India's ranking would have been even lower.
Ignore economists. Ignore the central bank. Ignore rating agencies. But how long will the Indian government manage to ignore every finger being pointed at the messy state of affairs? Steep inflation, current account deficit, fiscal deficit are just a few of the macro economic factors haunting India for long. But there are some grave ones like the debt to GDP ratio in India exceeding 90%.
Undoubtedly with policy logjam and shortage of critical resources, it is rather difficult to buy into 'India story'. Especially if someone is hoping for a quick turnaround in the situation. We are therefore least surprised by the comments of Jim Rogers. In an interview to Business Standard, the well known investor has said that he is no longer "a fan of India". In fact that he is also short on India.
We do not blame him for the pessimistic view as anyone looking for short term gains from India is bound to be disappointed. All that we hope for is that the government should not spoil India's long term prospects completely.
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