India Snap Shot
India one of the largest democracy of the world is the is the seventh-largest country by area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world. A country with immensely rich cultural heritage including numerous languages, traditions and people and its uniqueness is in its diversity.
India , one of the largest democracies in the world, is the 7th largest country by area, the 2nd most populous country with over 1.2 billion people, and is today regarded as one of the most prominent emerging economic powers which can play a lead role in driving the global economy in the years to come. There are quite a few reasons as to why India stands out as an attractive investment destination , and why today is being looked upon, along with China as one of the key factors behind the rising of Asia. The image of India as a place to do business has particularly improved quite a lot during the 1 year of the Modi Govt.’s rule, and there are some key reasons behind this brand enhancement, which include : liberal FDI regime, the Land Acquisition Bill, the coal and power sector reforms, direct transfer subsidies, streamlined tax regimes etc. It must be emphasized that India is expected to have the fastest GDP growth rate in emerging markets and will beat China by 2016 if it grows over 7.5% next year. The government is counting on 8%. Also, experts feel that Investors like the Monetary Policy discipline of RBI Governor Raghuram Rajan. India is focused on managing inflation, which helps the Central Bank to lower interest rates as it did recently. A stable and strengthening rupee also reduces forex risk for U.S. investors. The lower price of oil and better fiscal management, including cutting government subsidies, will help reduce twin fiscal deficits. India Inc’s corporate earnings growth rate is expected to average 7% this year, which is better than the average earnings growth rate in the MSCI All Country World Index. Next year is even better once corporate taxes get cut, and the federal goods and services tax replaces state taxes for companies shipping goods across boundaries. Bloomberg data estimates average corporate earnings for the MSCI India Index to be over 16%. Experts opine that factors like a reform-oriented Government, the potential for an investment-led boost to growth, favourable demographics, and lower oil prices – all make for a very positive mix for India. India has truly come a long way since the first wave of liberalisation 25 years ago and, as a country, we should be very proud of the progress we’ve made in this period. Now, the feeling is : India has the right objectives and the right leadership in place. It all depends on the execution now. If we can achieve sustainable growth of 10%-plus for a reasonable length of time, we can really aspire and achieve a growth which will be equitable in terms of employment generation and poverty alleviation.