Hello everyone,
Given my location advantage, I grabbed the opportunity to start the discussion.
I am not very happy to begin by putting forth a pessimistic view – 2020 is too soon a deadline to achieve the super power status.
I agree with the topic title that there is great optimism surrounding India story after the elections. Indian stock markets are hitting new highs everyday and it also is the best performing emerging market in the world so far in 2014. Rupee is stable. Growth targets revised. The government is very business friendly and keen on pushing economic reforms.
However, I doubt if the surge in foreign investments are solely driven by the fact that the foreign investors trust the new government. It is because of the free money flowing in the developed markets in the name of “Quantitative Easing”. When US stopped, Japan started. EU also has QE in its plans. So when Japan stops QE, EU might pick it up. So all these free money flow into the most promising emerging market right now. China is not at its best. Russia is in trouble. India has become the defacto option. To me it is a lucky coincidence. I am eagerly waiting to see if our markets are strong enough to withstand when the QE stops altogether.
Even if all goes well, the only reasonable target in the next five years would be to reach a consistent fast growth mode. To become a super power is a different story altogether. It would take decades before that happen. We have more fundamental issues to solve before aspiring to be a super power. To quote my friend in my school, “India is rich, Indians are poor”.
Looking forward for more thoughts.
