It is said about India that whatever you say about it, the exact opposite is also true. But for me, India is one of the most predictable markets that you can look at. If you look at India’s growth performance, it has mirrored the global emerging markets boom. Even when growth has faltered it has slowed down in line with what is happening in emerging markets.
But what has me worried about India currently is the inflation problem and even more the fact that manufacturing as a share of overall Gross Domestic Product has been stagnant for many years. This is partly because of the schemes that offer rural people incentive to remain on the farm than move out into urban areas. However, the good news is there is a lot of activity in rural India. Whenever I come to India and travel to Delhi and Mumbai, I get quite pessimistic. But when I travel to rural India I feel overjoyed because that is where the real change is going on.
With a population of more than 1 billion India is more like the United States of Europe. Unlike China or Korea, which are very homogeneous societies, India is a very heterogeneous society. We have very strong linguistic barriers and a very strong state identity. One thing that has always struck me is that not a single state leader in India has been able to go national. India’s national social fabric is one of very strong state identity and we have prospered as a loose federation.
The past decade saw emerging markets ride a tide of easy money. That phase is over. Emerging markets have done relatively well but within them there is a great dispersion. This year proves that. The likes of China and Brazil are muted but Turkey and the Philippines are up 30-40%. We are in a critical stage; emerging markets are 40% of the global economy. But we need to keep the return rhetoric and time horizon reasonable. The country that does best in the first decade is rarely the one that does well in the second.
Excerpts from the address made at the India Investment Forum 2012
Ruchir Sharma, Managing director, Morgan Stanley Investment Management
We at Outlookindia.com welcome feedback and your comments, including scathing criticism
1. Scathing, passionate, even angry critiques are welcome, but please do not indulge in abuse and invective. Our Primary concern is to keep the debate civil. We urge our users to try and express their disagreements without being disagreeable. Personal attacks are not welcome. No ad hominem please.
2. Please do not post the same message again and again in the same or different threads
3. Please keep your responses confined to the subject matter of the article you are responding to. Please note that our comments section is not a general free-for-all but for feedback to articles/blogs posted on the site
4. Our endeavour is to keep these forums unmoderated and unexpurgated. But if any of the above three conditions are violated, we reserve the right to delete any comment that we deem objectionable and also to withdraw posting privileges from the abuser. Please also note that hate-speech is punishable by law and in extreme circumstances, we may be forced to take legal action by tracing the IP addresses of the poster.
5. If someone is being abusive or personal, or generally being a troll or a flame-baiter, please do not descend to their level. The best response to such posters is to ignore them and send us a message at Mail AT outlookindia DOT com with the subject header COMPLAINT
6. Please do not copy and paste copyrighted material. If you do think that an article elsewhere has relevance to the point you wish to make, please only quote what is considered fair-use and provide a link to the article under question.
7. There is no particular outlookindia.com line on any subject. The views expressed in our opinion section are those of the author concerned and not that of all of outlookindia.com or all its authors.
8. Please also note that you are solely responsible for the comments posted by you on the site. The comments could be deleted or edited entirely at our discretion if we find them objectionable. However, the mere fact of their existence on our site does not mean that we necessarily approve of their contents. In short, the onus of responsibility for the comments remains solely with the authors thereof. Outlookindia.com or any of its group publications, may, however, retains the right to publish any of these comments, with or without editing, in any medium whatsoever. It is therefore in your own interest to be careful before posting.
9.Outlookindia.com is not responsible in any manner whatsoever for how any search engine -- such as Google, Bing etc -- caches or displays these comments. Please note that you are solely responsible for posting these comments and it is a privilege being granted to our registered users which can be withdrawn in case of abuse. To reiterate:
a. Comments once posted can only be deleted at the discretion of outlookindia.com
b. The comments reflect the views of the authors and not of outlookindia.com
c. outlookindia.com is not responsible in any manner whatsoever for the way search engines cache or display these comments
d. Please therefore take due caution before you post any comments as your words could potentially be used against you
10. We have an online thread for our comments policy:
You are welcome to post your suggestions here or in case you have a specific issue, to directly email us at Mail AT outlookindia DOT com with the subject header COMPLAINT