Ruchir Sharma on India's Economic Future
Ace investor and author Ruchir Sharma believes India can learn valuable lessons from countries that once shone as economic superstars but have since faltered. While optimistic about India's long-term prospects, Sharma emphasizes the need for continued effort.
Speaking at the India Today Pop-Up Conclave, Sharma cautioned against complacency, citing examples like Canada, whose economic performance has dwindled in recent years. He also mentioned Germany, South Africa, and Chile as cautionary tales of "breakdown nations."
Sharma believes political stability alone is insufficient to avoid growth stagnation. He advocates for a government that actively reduces its role in people's lives, fostering a more conducive environment for both domestic and foreign businesses. He warns against excessive reliance on investigative agencies, highlighting the detrimental impact on investment.
Sharma points to India's expensive stock market and the need for improvement in the on-ground environment to attract foreign direct investment (FDI). While India attracts over 1% of GDP in FDI, China attracts a significantly higher 4%.
Despite these challenges, Sharma acknowledges India's impressive wealth creation in the past five years, driven primarily by domestic investment. He credits the BJP-led NDA government for controlling inflation, which has helped mitigate anti-incumbency sentiment.
Overall, Sharma's message is one of cautious optimism. He believes India has the potential to achieve sustained economic growth, but only through continued effort and a commitment to creating a more favorable environment for businesses and investors.