For India, a seat at every global high table in the next 5 years

I returned to India 22 years back after finishing MBA. The reasons had nothing to do with my deep love for the country — it was purely personal.

Of course, having come back, as humans are wont to do, I started rationalising my decision in light of the then-finance minister Manmohan Singh’s Budget of 1991, where he promised an India that would make Indians proud, or something to that effect.

So I made a call, which was more of a Hobson’s choice, actually — that India will be the place to be in for the next 20-30 years; that India would be a very, very important market in the global scheme of things; and, that the world would look at India with respect.

In 1991, that was a silly call to make. For the next 12-13 years,  nothing of that sort happened. India remained an economy with tonnes of potential, and little to show by way of execution (except for the IT companies) — almost the Vijay Amritraj of economies.

Industrial India remained a collection of companies that looked terrific on paper, but delivered very poorly on returns.

Most of corporate India had only one mantra that it followed religiously: fleece the foreigner of as much capital as possible, set up absurd projects, blow up/siphon off money.

Repeat the process.

The number of foreign fund managers left weeping all through the noxious’90s were legion. “We hate this country”. “India will never get its act together.”. “The politics, the companies…all are a bunch of crooks”. All of which was mostly right.

I also secretly feared that I had made a big mistake by coming back, personal reasons be damned.

A meeting with a US-based, Indian-origin investment banker also clarified life a little bit better for me: “Shankar,” he said, “if you had been on Wall Street, you would have been worth hundreds of millions. In India, you are playing in too small a pond. Choose a bigger pond to play, and even if you remain a small fish, you will be the size of a Great White in a small market”.

Conversations like that stuck to your mind like a leech.

Till 2004. That’s when it all turned around for India, and it has been a rollicking ride since.

And the real boon was the global crisis of 2008. India couldn’t have wished for a better coming-out party. The crisis made India look good, even better than China.

China had to spend close to 15% of its GDP to maintain its growth rates. India spent almost nothing, and still grew well through the crisis and thereafter.

The whole world re-rated India post the crisis, not so much in financial terms as in psychological.

No longer did the London cabbie sneer at you. The bell hop in Hong Kong didn’t drop your bags on your toes. The Swiss banker didn’t dismiss your illegal account as too small.

Yes, the last 5-6 years, and specifically the last two, have been a real ego trip - in being Indian.

So what lies ahead? Even to the biggest India cynic, the completion of the swish Terminal 3 in New Delhi from ground-up in 3 years flat is a real marvel. It somehow, mitigates the 15 years or so taken to complete the sea link in Mumbai. Yes, we are improving, all right.

So my take is that the next five years will be more of the same good things.

For one, purely from a financial standpoint, corporate India has learnt that while it is OK to fleece foreigners, just don’t do it excessively, guys.

Show some returns. Don’t assume that capital is going to be cheap and plentiful forever.

The crisis taught corporate managers basic things about capital that most Indian housewives know. Well, better late than never.

So, I genuinely believe that corporate India is a bit more mature now than it was ten years back.

What’s even more heartening is that finally it seems that the government gets it. I, of course, must confess to being die-hard Congress supporter, but even with that bias, I remain firmly of the opinion that the present government truly means well for the country, and there is genuine desire for progress even in some sections of the bureaucracy.

Of course, the problem for India, however, remains pathological complacency. While there is no doubt we have done quite well, the fact remains we get satisfied with too little.

The Commonwealth Games is a good example. The first question is whether it will be held on time. But, more pertinently, do we need the Games at all?

Who is interested in Commonwealth Games except for a few relics of the British empire? To spend an awful lot of money for a British wet dream seems a tad excessive.

What will be truly criminal will be to make a hash of this wet dream in a manner that ensures India never gets to host an Olympics.

Don’t forget, we are the only country in the Bric-pack that has not (and Brazil will host the one after the London Games) hosted an Olympics.

Looking at the state of preparation for the Commonwealth thingy, Thank God we didn’t.

But balancing this problem of complacency is the energy of small-town India.

For us big-city slickers, this has got to be a must-do: to go to a small town like Haridwar, and find spanking new hotels, nice restaurants, pretty decent spas and a general air of enterprise and buzz.

It convinces you that India is truly a national story now, as opposed to being a Fort and Nariman Point story.

This, to my mind, is a phenomenon that is still not understood very well by most of us. It is small-town India that will buy up expensive lingerie and Tag Heur watches (just to clarify, women will buy the
lingerie and men the Tag Heurs).

Driving this small-town India consumption has been not the stock market (and may it remain so), but real estate. This boom has been truly democratic, reaching the lowest strata of society, unlike a stock market boom.

I am, therefore, very optimistic about the real economy in India.

Unless China invades us, I don’t see a major hiccup. India will keep getting seats at the high tables across the world.

I am a very patriotic Indian; I will take a bullet for my country, but I am not a proud Indian. Maybe the next five years will change that. 

The writer is the Chief Global Trading Strategist at First Global.