We

will be remembered only if we give to our younger generation a prosperous and safe India,
resulting out of economic prosperity coupled with civilizational heritage. - APJ Abdul Kalam

Indias Schadenfreude

Vol. III, No. 35, 11 September 2015

I read this article in Reuters in the first week of September 2015: Modi asks billionaires if Chinas pain could be
Indias gain? Apparently he invited corporate honchos and policy makers and other professionals for a
brainstorming session on how to make India a better place to do business. Many in India are watching with
glee the recent Chinese meltdown characterized by the stock market crash, the falling Yuan and their negative
fallout on global markets. There is hope in India that we could possibly replace China as a preferred investment
destination!
According to the IMF and many think tanks, Indian reforms under the new government are on track. The OECD
Composite Leading indicators (CLI), for instance, says Indias growth has been firming up and is faring better
than any other emerging economy- including China. Falling oil prices also benefit us big time. The PM, on his
part, and been globetrotting and has been promised billions in investment.
However, we need to do a more pragmatic analysis and be cautious of the following:

India is still a relatively small economy compared to China. Indias projected GDP growth rate of 7
percent plus is based on a much smaller denominator.
Low oil prices actually means that the global economy is weak.
India still remains a very difficult place to do business. World Bank ranked India 142 behind countries
like Pakistan and Iran in terms of ease-of-doing-business!
Physical infrastructure remains under-developed.
Investment promises made on the Prime Ministers foreign visits have not yet fructified.
The parliament is in a state of dysfunction and no new bills have been passed.
Government controls over institutions education, NGOs, media etc raise many questions (Remember
Greenpeace, FTII?).
Indian Industry is still not very competitive or innovative and the shortage of skills still continues.

India definitely has an opportunity today. It had one yesterday and shall have more in the coming days.
Eventually, huge gatherings at Madison Avenue and make believe sloganeering wont count for much if nothing
tangible reforms and key investments do not happen. Its important to walk the talk rather than manipulate
statistics and public opinion.

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Written by: - Dr. Amit Mittal

Dean, Ph.D. Programs, CBS

www.chitkara.edu.in

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