The Indian economy has honed the mantra of resilience to thrive in the chaos of back-to-back economic shocks and bounce forward to grow at 7.3%. EPISODE #159
Interesting article Anil and the interview with the economist from Axis Bank, was also skillfully conducted. While comparing with the rest of the world, India definitely can give itself a generous pat on the back ; however in the current situation, the US economy has shown unexpected resilience, I feel. China always managed to pip us to the post in race for fastest growth, but somehow they have lost their way, this time; and their aggressive behavior is partly to blame. Japan and Germany, the other economies ahead of India are entering recession but US has managed to bounce back and with the prospect of arms sales, in view of the current geopolitical situation, their future, along with some of the other arms exporting countries, is set to revive. But the per capita income of these countries is way above India and the real challenge for India, as I perceive, will come after the 8 trn $ line is breached. So for the next decade India should be able to keep it's nose in front and keep on growing at the fastest rate. With this government in the saddle, India has come out of the hibernation induced by self serving political parties and leaders. Barring an internal chaos or external aggression, I don't forsee a change in course. Thank you Anil, for a thought provoking article.
Thank you for your kind words and detailed thoughts. Adding to your observations on China, I just saw a report in Nikkei Asia which points out that for the first time, in dollar terms, since 1979, China's share in global GDP has fallen. Frankly, its best is behind it. Going rambo at this time is certainly not helping its cause.
In fact, I believe their experience holds out a lesson for India. Keep your head down and work to improve the lot of your own country. To improve the lot of 1.4 billion Indians is a task of several life times. Especially, given the utter neglect in the first seven decades.
As a guest for my next week's episode, Diva Jain, remarked: "This government has treated the provision of basics as a right and not a privilege."
While resilience is the buzz word in banking, finance and risk management, we must note that Indian economy appears resilient due to the policies of Modi Govt. Had there been any other Govt, it could have been a different story. If Modi continues for another decade, we can certainly hope to have governance in place which would be strongly resilient fir years to come.
Undoubtedly the incumbent regime, NDA, should be given all the credit for their stewardship of the Indian economy through what is one of the most difficult times. All the more, for their ability to think out of the box and show the commitment to stay the course--despite motivated criticism.
However, it is also a fact that change does not happen in a vacuum. The pivot began, like I pointed out in 1980. Due to a combination of the lack of political conviction as well as circumstances wherein the economy and people were plumbing lows (poverty was more than 50%, literacy was below 50%), the pace of change was incremental. Hence, unlike today, it was always reforms of stealth. Ideally, it should have happened faster. But it didn't. Yet, change continued.
The turning point in my view was the idea of Aadhaar--again something that began with the NDA under Vajpayee--launched in 2009 by the UPA. The incumbent NDA brought political conviction, energy and drive to the table when the took charge in 2014. The rest is history.
My point is that there is actually continuity in the direction of policy change--despite deep differences in political ideology and method.
Thanks for the perspective. The thing that stood in the NCAER graph that you have reproduced is how off the mark the World Bank and IMF projections are. Wonder if it has got to do with the fact that their model is flawed or they don't seem to catch what's happening on the ground.
Interesting question. Could be any reason. Generally I have seen that multilateral institutions operate like rating agencies. Either they are trigger happy or they are sleeping on the wheel--remember the 2008 crisis.
In this instance, frankly India has changed. Dramatically at that. Even when I was writing this week's newsletter I was stunned at the resilience of the Indian economy. Somehow this change seems to be resonating selectively. Some see it, others don't.
Guess it will take time for all this to sink in. We are too close to history.
As always, beautifully written, extremely informative and well researched piece. As an Indian, it gives me immense pride to see India coming out and asserting itself in all areas. I see the next 10 years as being very good for India. We are rightly projecting ourselves as a confident, capable, tenacious race and nation. I personally feel, alongwith all the above traits, we also possess humility in large measure. This we must continue to retain
Great to have you back. And thank you so much for the kind words.
Agree with you. There is no place for arrogance and no time to rest on laurels. It is like running on a treadmill--can't stop, given the distance India has to traverse before it provides for the bulk of its populace.
Resilience is a key word to the Indian Economy march towards economic progress ! Whenever a crisis has hit the economy, whether macro or micro, the nation has bounced back to stride ahead . Yes structural changes have acted as lubricant, however, I believe that it’s the Indian character to fight against all odds which cannot be ignored.
The inference that resilient growth is directly proportional to liberalisation of market may not always be true. On the democratic spring board enhanced government support in such crisis cannot be denied. The fiscal support during the Covid pandemic extended by Mr Modi government brought about a turnaround when the rest of the world was still struggling. Of course , many of these countries have always sworn by free market !
Thank you for your thoughts and engagement with this week's offering. Much appreciated.
Agree with you about the quick response of the union government in providing a safety net by extending free food grains to 800 million people.
Actually, this is part of the resilience I was talking about. In a historical context developing resilience required the state to minimise its role. But in a crisis, countries need to adapt--quickly at that; run with what works and abandon that doesn't. So in an abnormal situation, the government restored its role in providing a safety net for food, vaccines and of course ramping up capital expenditure to record levels.
Do try and read the book, Anti Fragile. It explains this idea in detail.
Interesting article Anil and the interview with the economist from Axis Bank, was also skillfully conducted. While comparing with the rest of the world, India definitely can give itself a generous pat on the back ; however in the current situation, the US economy has shown unexpected resilience, I feel. China always managed to pip us to the post in race for fastest growth, but somehow they have lost their way, this time; and their aggressive behavior is partly to blame. Japan and Germany, the other economies ahead of India are entering recession but US has managed to bounce back and with the prospect of arms sales, in view of the current geopolitical situation, their future, along with some of the other arms exporting countries, is set to revive. But the per capita income of these countries is way above India and the real challenge for India, as I perceive, will come after the 8 trn $ line is breached. So for the next decade India should be able to keep it's nose in front and keep on growing at the fastest rate. With this government in the saddle, India has come out of the hibernation induced by self serving political parties and leaders. Barring an internal chaos or external aggression, I don't forsee a change in course. Thank you Anil, for a thought provoking article.
Dear Gautam,
Thank you for your kind words and detailed thoughts. Adding to your observations on China, I just saw a report in Nikkei Asia which points out that for the first time, in dollar terms, since 1979, China's share in global GDP has fallen. Frankly, its best is behind it. Going rambo at this time is certainly not helping its cause.
In fact, I believe their experience holds out a lesson for India. Keep your head down and work to improve the lot of your own country. To improve the lot of 1.4 billion Indians is a task of several life times. Especially, given the utter neglect in the first seven decades.
As a guest for my next week's episode, Diva Jain, remarked: "This government has treated the provision of basics as a right and not a privilege."
Hopefully, India's best is yet to come.
Best
Anil
While resilience is the buzz word in banking, finance and risk management, we must note that Indian economy appears resilient due to the policies of Modi Govt. Had there been any other Govt, it could have been a different story. If Modi continues for another decade, we can certainly hope to have governance in place which would be strongly resilient fir years to come.
Dear Surendra,
Thank you for your thoughts.
Undoubtedly the incumbent regime, NDA, should be given all the credit for their stewardship of the Indian economy through what is one of the most difficult times. All the more, for their ability to think out of the box and show the commitment to stay the course--despite motivated criticism.
However, it is also a fact that change does not happen in a vacuum. The pivot began, like I pointed out in 1980. Due to a combination of the lack of political conviction as well as circumstances wherein the economy and people were plumbing lows (poverty was more than 50%, literacy was below 50%), the pace of change was incremental. Hence, unlike today, it was always reforms of stealth. Ideally, it should have happened faster. But it didn't. Yet, change continued.
The turning point in my view was the idea of Aadhaar--again something that began with the NDA under Vajpayee--launched in 2009 by the UPA. The incumbent NDA brought political conviction, energy and drive to the table when the took charge in 2014. The rest is history.
My point is that there is actually continuity in the direction of policy change--despite deep differences in political ideology and method.
Hope that helped.
Best
Anil
Thanks for the perspective. The thing that stood in the NCAER graph that you have reproduced is how off the mark the World Bank and IMF projections are. Wonder if it has got to do with the fact that their model is flawed or they don't seem to catch what's happening on the ground.
Dear Sidhartha,
Thank you for your thoughts.
Interesting question. Could be any reason. Generally I have seen that multilateral institutions operate like rating agencies. Either they are trigger happy or they are sleeping on the wheel--remember the 2008 crisis.
In this instance, frankly India has changed. Dramatically at that. Even when I was writing this week's newsletter I was stunned at the resilience of the Indian economy. Somehow this change seems to be resonating selectively. Some see it, others don't.
Guess it will take time for all this to sink in. We are too close to history.
Hope that helped.
Best
Anil
Excellent commentry Anil ! In many ways your last post and this go hand in hand. The digital revolution has been an absolute game changer !
Thank you so much Atul. Glad you liked it and read this as a sequel. Undoubtedly, India's digital play has been a game changer.
Best
Anil
As always, beautifully written, extremely informative and well researched piece. As an Indian, it gives me immense pride to see India coming out and asserting itself in all areas. I see the next 10 years as being very good for India. We are rightly projecting ourselves as a confident, capable, tenacious race and nation. I personally feel, alongwith all the above traits, we also possess humility in large measure. This we must continue to retain
Dear Niranjan,
Great to have you back. And thank you so much for the kind words.
Agree with you. There is no place for arrogance and no time to rest on laurels. It is like running on a treadmill--can't stop, given the distance India has to traverse before it provides for the bulk of its populace.
Best
Anil
Resilience is a key word to the Indian Economy march towards economic progress ! Whenever a crisis has hit the economy, whether macro or micro, the nation has bounced back to stride ahead . Yes structural changes have acted as lubricant, however, I believe that it’s the Indian character to fight against all odds which cannot be ignored.
The inference that resilient growth is directly proportional to liberalisation of market may not always be true. On the democratic spring board enhanced government support in such crisis cannot be denied. The fiscal support during the Covid pandemic extended by Mr Modi government brought about a turnaround when the rest of the world was still struggling. Of course , many of these countries have always sworn by free market !
Thanks Anil for thought provoking article !
Dear Balesh,
Thank you for your thoughts and engagement with this week's offering. Much appreciated.
Agree with you about the quick response of the union government in providing a safety net by extending free food grains to 800 million people.
Actually, this is part of the resilience I was talking about. In a historical context developing resilience required the state to minimise its role. But in a crisis, countries need to adapt--quickly at that; run with what works and abandon that doesn't. So in an abnormal situation, the government restored its role in providing a safety net for food, vaccines and of course ramping up capital expenditure to record levels.
Do try and read the book, Anti Fragile. It explains this idea in detail.
Look forward to your continued participation.
Best
Anil