The Modi Government has been in office for about 15 months and it’s time to take stock of what has happened to the Indian economy. Despite having an overwhelming majority in the Lok Sabha, the BJP has been pushed on the back foot because the opposition has better numbers in the Rajya Sabha. Several reform bills have got stuck in the legislative process. Sadly, it appears certain that the monsoon session of Parliament will go down the drain costing approximately Rs 260 crores to the tax payer.
Yet, there have been some good tidings as well. “India appears to be the most attractive among emerging market (EM) countries at the moment,” says an article in The Economic Times. According to the report from Macquarie, the internationally renowned investment bankers, “domestic mutual funds (MFs) have seen net inflows of $15bn in the last 12 months as against $6bn of net outflows from FY10-14, and this has been the main driver of the market as foreign investors (FIIs) took a back seat. FIIs have poured in $11 billion in the past one year. ”
In other news, Taimur Baig of Deutsche Bank in an interview with ET Now says, ” “When you think about India and the fact that the GST is running into a lot of problems, land acquisition may not happen, it seems the expectations were high and we are not getting there. But when you look outside India, for example, Brazil, Turkey, Russia, China or Indonesia, all of a sudden India looks like a million roses.”
Adrian Mowat echoes this optimism. The Managing Director & Chief Strategist for Asian and Emerging Market Equity at JP Morgan, Mowat says, in an interview with CNBC-TV18, that India is the fastest growing large economy with benign inflation that will allow it to endure high valuations.
So there is hope still !