Are the days of the 'India story' numbered?

India story will stay for two to three decades. The main reasons for this is our demographic dividend, tremendous infrastructure needs, scope for reforms, high savings rate and the other usual advantages like legal system, democracy, reasonable law and order, and English spaeaking and skilled labour. The only worrying issues are corruption through dicretionary allocation of resources, no political unanimity except on distribution of goodies before election, lack of reforms, land and environmental issues, stability of policies, and increasing inequality beyond a point. However, have we not been growing at 8 percent plus despite all this. Imagine if half of these issues are resolved, we might become the fastest growing economy.

Recently I have reviewed my portfolio by comparing the CMP with those in April,2006. In April 2006, the index was 11750 and now it is 18500 and odd. Out of the 9 scrips that I have reviewed 3 are PSB's of which 2 stocks were quoting at +10% of what they were in April,2006 one stock has given 200% return. Surprisingly in the mid cap space, Out of the 6 stocks 4 stocks were quoting at less than 50% at which they were quoting in April,2006, inspite of the fact that their turnovers, net profit, EPS and BV have considerably improved ( more than doubled). Further they are all consistent dividend paying companies. I think that all this hype of FII buying, India growth story et al are are for the consumption of gullible investors. I think that the retail investor has not benefitted anything from the noise being made by the media and the brokers. Infact a set of new generation investors have lost heavily in the 2008 market crash and my guess is that most of them will never look back at equity as an investment opportunity.The high inflation, quality of governance, Government inaction on various financial reforms are impeding the growth of equity markets and it may be quite a while for the market to give good above normal returns. In the meanwhile if all these so called investment gurus, who play with free float money available in the western countries by moving from one country to another and one geography to another move away from India, we may go back to the 1994 era.

It is ironic that Equitymaster should paint a dismal picture on the one side and on the other seek subscription for several services in their portfolio. I feel making money is pure luck in Indian market for retail investors at least. Now the markets in both the fastest developing economies, i.e. India and China are not going anywhere. If there is no predictability as far as the FII activities are concerned, how can retail investors ever trust the markets. Further, with the abolition of entry loads, the Mutual Fund industry is also unable to offer incentives to agents to get the retail investors invest in mutual funds In India, the regulatory authorities like to overregulate industries which abide by the law. There were no retail investors complaint against mutual fund houses unlike insurance companies, yet, SEBI abolished entry load! Therefore as long as Indian money from PFs, Pension funds and retail investors does not come in the market, the markets will not be in a position to move upwards.

BSNL is missing out its inherent advantage.
The service personnel may be in league with private competitiors to kill BSNL.

What?Days of India story are numbered? In fact story never started !! Reasons - (1) Corruption. It has killed the story for india- but china too is equally corrupt but they have advantage that 98% population is single ethnic group (Han)so they love their country.Plus single party(Communists)dictatorship keeps better control. BJP loves country but multi ethnic structure of Indai denise them single party rule (2) Population explosion.(3) fertile land and forest land aquired by force by government has lead to mass insurgencies like naxalite bandits.(4) cultivable land is being sold by farmers to builders and non food crops like flowers for export are grown leading to food shortage furter incresing unrest.(5) environment degradation making monsoon delayed and unpredictable.(6) reservations in education & jobs are
killing the merit. 80 % state revenues are spent in salaries of babus. (7)Religious fanatism is on rise since past two decades spending too much on internal security.(8) India's too much dependence on services sector. It is painful but, Days of tottering Republic of india are numbered.

Bsnl and mtnl are losing market share in mobile telephony because of their bad services not for their focus on landline service

Very Good analysis.
Thanks & Appreciation.

the choice of countries by Mr. Mobius is quite interesting coz they do possess quite strong investment capabilities. the days for india as an attractive destination r numbered especially coz of the rising scams which is painting the country in a very poor picture. Hardly any corrective measures r being taken, & i dont find any unexplored avenues left...the upcoming frontier choices will attract the daddies of FIIs & b4 u know it, som other country will get the title of most eligible country for investment which india truly deserved

Eq.Master Team,
At the very outset let me admit that I am not at all en economist !
As an oridnary Aam Aadmi of a great democracy let me
put forth in writing (after havingbread your article) some simple thoughts that flashed through my simple mind in the context of the subject matter dealt with therein !!

I am prompted to cite the instances of contingent assets
and contingent liabilities of Frontier Markets but have elucidatorily illustrated that their elo(contingent libilities like the proverbial Sword of Damocles hanging above one's head by a slender thread)are those that are hovering above, about to crystallise into reality depending upon the happening or not happening of a FUTURE UNCERTAIN EVENT ""

On the sated about the Assetsme analogy you have eminently illustra