What's new

India unlikely to sustain growth of over 5% in coming years, says Ruchir Sharma

CrazyZ

SENIOR MEMBER
Mar 3, 2019
3,157
2
3,870
Country
Pakistan
Location
United States
India’s growth is unlikely to be sustained over 5 percent in the coming years, believes global investor and author Ruchir Sharma. Sharma says it is going to be extremely difficult for the Indian economy to achieve a growth of over 7 percent at any point.

"Now, we are in an environment where that has become much more difficult because we have a period of deglobalization. So, in that way, I think for the Indian economy to ever achieve those growth rates of 7-9 percent over the coming decade on a sustainable basis is going to be extremely difficult,” Sharma said in an interview with CNBC-TV18.

“If you look at post World War II history, all the cases of countries that were able to expand or grow very rapidly, were nations that were able to export their way to prosperity. This included China, this included, before that, Japan, Korea, Taiwan, Singapore, the entire East Asian economic miracle, that was the centerpiece as far as the development strategy is concerned," he added.

Sharma believes that India will never grow like East Asia if it allocates more to the social sector than infrastructure. “We can be unrealistic and think that the government can carry out massive reforms and we can achieve those growth rates just like China did in 1980 and 1990, but look at the politics of this country. I just don’t think that the politics of this country is conducive to enact those kinds of reforms... East Asia did not spend much on social welfare at this stage of the development," he explained.

Successful nations spend more than 3 percent of GDP on R&D, says Sharma. However, he notes that India spends less on R&D and it is a hurdle to growth in an era of digitalization.

"This I think is a major headwind for future economic growth because digitization is one of the big trends that has emerged over the last decade which has only been accelerated by this pandemic. So with such low level of R&D spend, it will be hard to get a big productivity bump in this era,” he said. Sharma further added that regulatory overkill in India and mistrust of businesses is not a good sign.

According to him, expectations of stimulus are far too unrealistic in India as we tend to always compare ourselves to the developed countries. It is a disadvantage for India that it went into the crisis with a high level of public debt and fiscal deficit, Sharma noted.

“We are still a developing country, our per capita income is still below USD 5000, and if you look at most countries in that cohort, they have not been able to enact such large stimulus plans because they are constrained by either having a very large public debt which is a very large government or because their inflation and currency are vulnerable to any large scale printing of money that the developed countries such as the United States or even UK are able to do," he explained.

However, he said what the Indian government has done post pandemic on stimulus is "quite realistic".

“The benchmarks of economic success have changed. The more we talk about self-reliance – you can argue that is a realistic strategy -- the more difficult it is going to be for the economy to grow much above 5 percent. So, if I were to hazard my best guess as far as what India’s growth rate is going to be over the coming few years, I doubt very much if on a sustainable basis we are going to be able to exceed 5 percent,” says the author.

In the adaptation of his New York Times 2016 bestseller, ‘The Rise and Fall of Nations: Ten Rules of Change in the Post-Crisis World’, Sharma uses his matrix of rules to identify, which nations will emerge winners in a post-pandemic world.

Based on data gathered over the last 25 years, Sharma has further distilled his 10 rules, to the top 4 that he believes will matter the most. These include a competent government, low debt, domestic strength and tech sophistication. Based on this, Sharma puts together a list of winners, that will thrive in the post-pandemic world.

"The 10 rules are perennial, evergreen, they matter for long cycles, but in the next 12-18 months as we recover from this pandemic, I think the 4 rules, in particular, will dictate a lot of choices that investors make or other business people make in terms of where to direct their capital in the foreseeable future,” he said.

 

CrazyZ

SENIOR MEMBER
Mar 3, 2019
3,157
2
3,870
Country
Pakistan
Location
United States
Covid has caused India 10-years of economic growth.

There goes the Supa Powa India dream... again.
Impact of deglobalization/decoupling is still an unknown. India's bad debt slow motion financial crisis has been lowering its growth for many quarters now. Covid can only make things worse. India is going through a balance sheet recession as described by economist Richard Koo on Japan in the 90's.

Due to all this debt, families and businesses will lower consumption to improve their balance sheets. Banks will lend only to the highest quality borrowers. In India this will not lead to a secession but a slowdown in growth.

India may start experiencing a period of Japanification. Demographic decline will set in around 2040. India may have a period of balance sheet slowdown followed by demographic decline...very similar to what Japan experienced.
 

hussain0216

ELITE MEMBER
May 29, 2012
16,436
-21
22,765
Country
Pakistan
Location
United Kingdom
Hindutawadiwadi is a poison and threat to all South Asia

India in this form cannot be tolerated

And everyone must seek to bring it under control
 

GHALIB

BANNED
Jul 16, 2018
6,734
-70
2,993
Country
India
Location
India
India’s growth is unlikely to be sustained over 5 percent in the coming years, believes global investor and author Ruchir Sharma. Sharma says it is going to be extremely difficult for the Indian economy to achieve a growth of over 7 percent at any point.

"Now, we are in an environment where that has become much more difficult because we have a period of deglobalization. So, in that way, I think for the Indian economy to ever achieve those growth rates of 7-9 percent over the coming decade on a sustainable basis is going to be extremely difficult,” Sharma said in an interview with CNBC-TV18.

“If you look at post World War II history, all the cases of countries that were able to expand or grow very rapidly, were nations that were able to export their way to prosperity. This included China, this included, before that, Japan, Korea, Taiwan, Singapore, the entire East Asian economic miracle, that was the centerpiece as far as the development strategy is concerned," he added.

Sharma believes that India will never grow like East Asia if it allocates more to the social sector than infrastructure. “We can be unrealistic and think that the government can carry out massive reforms and we can achieve those growth rates just like China did in 1980 and 1990, but look at the politics of this country. I just don’t think that the politics of this country is conducive to enact those kinds of reforms... East Asia did not spend much on social welfare at this stage of the development," he explained.

Successful nations spend more than 3 percent of GDP on R&D, says Sharma. However, he notes that India spends less on R&D and it is a hurdle to growth in an era of digitalization.

"This I think is a major headwind for future economic growth because digitization is one of the big trends that has emerged over the last decade which has only been accelerated by this pandemic. So with such low level of R&D spend, it will be hard to get a big productivity bump in this era,” he said. Sharma further added that regulatory overkill in India and mistrust of businesses is not a good sign.

According to him, expectations of stimulus are far too unrealistic in India as we tend to always compare ourselves to the developed countries. It is a disadvantage for India that it went into the crisis with a high level of public debt and fiscal deficit, Sharma noted.

“We are still a developing country, our per capita income is still below USD 5000, and if you look at most countries in that cohort, they have not been able to enact such large stimulus plans because they are constrained by either having a very large public debt which is a very large government or because their inflation and currency are vulnerable to any large scale printing of money that the developed countries such as the United States or even UK are able to do," he explained.

However, he said what the Indian government has done post pandemic on stimulus is "quite realistic".

“The benchmarks of economic success have changed. The more we talk about self-reliance – you can argue that is a realistic strategy -- the more difficult it is going to be for the economy to grow much above 5 percent. So, if I were to hazard my best guess as far as what India’s growth rate is going to be over the coming few years, I doubt very much if on a sustainable basis we are going to be able to exceed 5 percent,” says the author.

In the adaptation of his New York Times 2016 bestseller, ‘The Rise and Fall of Nations: Ten Rules of Change in the Post-Crisis World’, Sharma uses his matrix of rules to identify, which nations will emerge winners in a post-pandemic world.

Based on data gathered over the last 25 years, Sharma has further distilled his 10 rules, to the top 4 that he believes will matter the most. These include a competent government, low debt, domestic strength and tech sophistication. Based on this, Sharma puts together a list of winners, that will thrive in the post-pandemic world.

"The 10 rules are perennial, evergreen, they matter for long cycles, but in the next 12-18 months as we recover from this pandemic, I think the 4 rules, in particular, will dictate a lot of choices that investors make or other business people make in terms of where to direct their capital in the foreseeable future,” he said.

who is this idiot ? some relative of nepali PM olly sharma ?
 

madlemon50

FULL MEMBER
Aug 22, 2020
169
1
231
Country
China
Location
China
who is this idiot ? some relative of nepali PM olly sharma ?
Swallow the fact is better going around like a dog convincing everyone that india is the next superpower. If you are the candidate you would've done so, you have more than 60 years in fact more than 70 years but you achieve nothing.

Your the cesspool of the world so swallow it and start working to improve your country instead of spending so much time online creating propaganda and fake news to make yourself comfortable. The fact is the FACT, and the fact is india remains a shithole so nothing going to change that.
 

GHALIB

BANNED
Jul 16, 2018
6,734
-70
2,993
Country
India
Location
India
Swallow the fact is better going around like a dog convincing everyone that india is the next superpower. If you are the candidate you would've done so, you have more than 60 years in fact more than 70 years but you achieve nothing.

Your the cesspool of the world so swallow it and start working to improve your country instead of spending so much time online creating propaganda and fake news to make yourself comfortable. The fact is the FACT, and the fact is india remains a shithole so nothing going to change that.
don't need advice from communist mental slaves who are keeping our uighar and tibettan brothers in communist concentration camp .
 

madlemon50

FULL MEMBER
Aug 22, 2020
169
1
231
Country
China
Location
China
don't need advice from communist slaves who are keeping our uighar and tibettan brothers in communist concentration camp .
Is that the best you can come out with indian boy? lol
Typical indians when confronted they will try to change the topic to something else to hide that they are the absolute loser.

Fix your garbage country before you even discuss with me about Xinjiang or China. Now go back to your home where most of your stuffs are made in China lol.
 

hualushui

FULL MEMBER
Jul 3, 2019
1,397
-2
2,465
Country
China
Location
China
The Chicago Council of Global Affairs of the United States conducted a survey in India in 2007, and found that most of the interviewees believed that their country was already the second most powerful country in the world after the United States. ("International Herald Tribune", February 2, 2007)
 

Users Who Are Viewing This Thread (Total: 1, Members: 0, Guests: 1)


Top Bottom