Global investor and author Ruchir Sharma discussed the story of the 75-year-old Indian economy with NDTV’s Prannoy Roy. He said, “Compared to the rest of the world, India is no richer now than it was before independence, but it is on the upswing”.
Here are the highlights of Prannoy Roy’s conversation with Ruchir Sharma:
*The progress of India’s economy so far:
We started at rank six and we are currently at rank six. India’s development path has been reshaped. 60s, 70s were a terrible time for India. We reentered the development phase from the 1980s.
* The per capita income as compared to the rest of the world:
It’s V-shaped, which shows that we have bounced back. We are where we were at the origin data. The story about per capita income, the single most economic criterion of a country’s success, has been told more.
*We are back in the global race. India’s income per capita has risen and its global ranking has been rising.
We have made a significant progress and a big rebound in the 75 years of its history.
*China’s comeback far more spectacular:
In 1990s, new cities were created in China, a boom was there. The number of cities that came up were impressive.
In India’s case, in any rural area, only 10 percent have come from some other district. The migration is very low, which is not the case in China.
It’s very hard to do what China did but we can still emulate.
*Life expectancy so far:
On many indicators, our growth has been impressive, on others, it’s comparable to others and on some it’s a bit less.
*Progress so far in education:
*India’s progress in economic freedom.
We are still economically unfree compared to other countries. So, according to the data, the richer a country becomes, the more is the economic freedom.
*India’s stock market:
*India’s stock market has seen many winners:
The number of new billionaires we have in India has also gone up.
*Government keeps losing value:
Government-ownership has gone down from 15 percent to 5 percent in the market. The government and taxpayers have lost wealth because ownership has gone down in the stock market.
*India’s billionaire boom – 3rd largest in the world:
Of these 140, more than 110 are new billionaires. India has created more than 110 billionaires in the last decade and many of them are from manufacturing, healthcare and technology, sectors which India needs. It’s a very encouraging picture.
*The journey of the rupee:
Rupee has fallen by Rs 75 over the last 75 years. Today, the rupee is on a very cheap and competitive space.
Where Are We Heading:
*High growth story disappearing:
There are hardly any countries with 7 percent growth. The peak was in 2007, when several countries were growing at a rate of more than 7 percent, now there are hardly any.
*Reasons of the growth slowdown: The 4Ds
These 4Ds are factors which are lowering growth every year.
*India’s population growth is declining:
*Other populations are declining faster than China:
*Female labor participation:
Getting women to participate in our labor will change the growth rate of our country.
*New criteria of economic success: India will do well to sustain 5 percent growth:
*Sustaining high growth: India has done well so far
*India on track to be the 3rd largest economy in 10 years:
Going by these baselines, India will become the third largest economy by 2032.
*How long will it take for India to double its income per capita:
*India’s inflation performance improving:
We are better off now than we were ten years ago if we compare to the other countries. India has an inflation issue but it is very much the issue of the rest of the world.
*Where is the stock market headed:
The Indian stock trend is well above its long-term trend. If it gets more domestic investors, if it gets more investors, the return could be higher but assuming that trends will grow by 8 percent in 10 years.
*Competitive value of the rupee:
Rupee today is very competitive which should be good for our exports.
*India is digitizing faster than the world:
*Leakages less because of digitisation:
*India has pro-incumbency: