What's Working, What's not for India: Ruchir Sharma
STORIES, ANALYSES, EXPERT VIEWS
Ruchir Sharma, Founder of Breakout Capital and Chairman of Rockefeller International, in an interview in New York with Rahul Kanwal (News Director of India Today) and Aaj Tak (Executive Director of Business Today) talks about what India has done right and not so right.
On India growth trajectory: During the extraordinary boom in the 2000s, “where the Indian economy did grow at 9 per cent or so, the global economy was booming… growing at about 4 per cent or so; emerging markets, in general, were growing at 7 per cent. In the current era, the global economy’s growth rate has slipped to about 2.5 per cent, and in the entire history of India’s economic development, the country’s economy, on a sustained basis, has never been able to grow more than about three percentage points faster than the global economy. So….if the global economy is going to grow at 2-2.5 per cent, then for the Indian economy to grow much faster than 5.5-6 per cent is extremely difficult. It’s never been done before.”
On economic reforms and policy measures undertaken by the Modi government:
Typically, from an economic management standpoint, the first term of a government “tends to be when they carry out the big reforms. The second term is when you end up getting much more complacent. The good thing about the current government is that a lot of the good decisions have, in fact, been taken in the second term… I think it is more than just about reforms; it’s also about not doing the bad things….”
Not enough FDI: Sharma thins “these things take some time to come through. But… it’s also a lot about how domestic businesses are investing. Because if you look at India today, where is the investment boom? It’s happening on the government side."
