Is India the 'place to be' for long-term investors?
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» Will inflation cool off by year end?
» Does it make sense to give banking licenses to non-corporates?
» India Inc to go on a hiring spree in FY12
» Want land? Contact the babus
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A leading research house has recently stated that India is the place to be for long term investors. It has even given huge forecasts for the Sensex to go north of 22,000 levels by the end of the current year. It has based these assumptions on the fact that India has now identified its core problems and is publicly discussing the same. The core problem here refers to the infrastructure bottlenecks in the country. The research house opines that the first step to solving a problem is identifying and discussing the same. As Indian leaders have taken this first step, the problems will therefore be resolved and this makes India the ideal investment destination for long term investors.
Another school of thought begs to differ from this view. They feel that the problems in India go further than the infrastructure bottlenecks. The recent spate of scandals and scams has put a serious question mark on the governance in the country. Add to these ambiguous tax laws, rigid rules and regulations, policies that change overnight to suit populist views and the business environment becomes almost hostile. The recent cases of the Cairn-Vedanta deal as well as the POSCO deal go on to highlight these problems.
True that India has several problems. Some of these can be quantified as short term problems. But unfortunately they have been around for a very long time. At times like these, Indian politicians need to stop bickering among themselves. They need to wake up and take a solid stance on policy reforms that reinforces the belief and confidence in the business community. Once this happens, India would definitely yield the superlative returns that long-term investors seek.
Do you think India is a worthwhile investment for long-term investors? Share your comments with us or post your views on our Facebook page.
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There is no denying that inflation has come down in the last few months. However, this has been thanks to a high base effect and a tight monetary policy which is threatening to choke economic growth. We believe that high inflation is due to supply constraints and the lack of efficient and transparent distribution channels. Unless the government addresses these issues, inflation will continue to be a chronic problem.
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04:55 | Today's investing mantra |
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14 Responses to "Is India the 'place to be' for long-term investors?"
shome suvra
Jul 12, 2011For long term investments mutual funds should garner more retail funds thereby reducing their excessive dependance on wholesale funds.Differential tax treatments are also required for different financial instruments. Interchange of liquidity between banks and mutual funds should be reduced by providing special repo ability.
arischandra.T
Jul 11, 2011I believe there are good companies like TATA, BHEL, L&T, HDFC, SBI ......so on, invest in such companies and forget. I think one should have the patience to enter and stay in the market.
UDAY MEHTA
Jul 11, 2011The most important question we should all put to our ownselves is : " how corrupt are we within in our moral values ? ". After all we are the ones who build our nation ! As we sow, so we reap ! God Bless us with True Understanding and Values of life. God Bless us all !!!
Anand
Jul 11, 2011global scenarios affect our market. US economic out look is a matter of major concern. All economic indicators of US seems to be negative.further QE , induction of more $ in to world money supply will lead to price escalation; more unrest around the world. $ and US treasury bonds will be dispensed by the world; The real valuation of US $ may pull down the world economy. EU is in great trouble.Japanese economy no more support the world market. Chinese growth and export is in a negative spin. Which major country can support 30+ Trillion $ world economy.Investors have no safe asset class, except commodity. Considering all the above facts,for long term investors Indian market is a solace.
Vijay
Jul 11, 2011So what's new? Haven't we had bottlenecks, corruption, short-sighted policies before?
That corporate India flourishes DESPITE these hurdles shows the calibre of our enterpreneurs. India bashing is a pet hobby of those jealous of our eye popping 8% upward GDP growth which thumps the developed economy.
Am bullish, very bullish re: our long term prospects.
anupam garg
Jul 11, 2011Stop bickering...take a stand, damn it...high time already...our grandparents used to say india was a golden bird in earlier times, stolen by foreigners...ok now, 65th independence day is round the corner...& all we had durin these yrs was 1 india shining campaign which promised some future...which was agn destroyed by the ruling party
Boss, india may wait for another 65 yrs...i can't, m not allowed to, & m 2 small a player 2 influence nething...come august, & i'd hav 2 go 4 the most attractive investment option, money in my bank a/c can't just stay thr & rot...sounds stupid but tht's 1 hardcore reality...m not commenting now, m pleading actually...if thr's a correction, if thr's a stand, it better happen NOW
Comments as made by vinod & pradeep r obvious...but they fail 2 understand tht the deep rooted problems r comin out in the open & r known, waitin 2 b resolved...But solutions just wont happen in a day...r we ready 2 resolve the problems? r we ready 4 another india shining? If answer to these questions is yes, then wt* r we waitin 4?
padmanabhan.s
Jul 11, 2011If we take the history of India from being a purely agrarian economy it has emerged a frontrunner in the services sector(read IT) manufacturing is also picking up, we have been studily growing at a reasonable pace of growth inspite of scams,bottlenecks and our politicians...... what is commendable is the grit of the entrepreneurial talent that is available in India and the availability of skilled workforce and great managerial talent... if only we had a more condusive enviornment and supportive infrastructure I sure India is a great place for long term investors!!
Rajeev D.
Jul 11, 2011Every country has tons of scams, not only India. What is interesting is that Apple just released an iPhone app a few days ago, called Scam Detector, which exposes in detail over 350 of the most notorious scams in the world. India is in a few of them. It is worth checking it out, if you have an iPhone.
VINOD MATHUR
Jul 11, 2011No.Certainly not.
Poor governance.P M say something .Ministers refute & say another.some Ministers do what they think good for them or their party ideaology. No discipline in the cabinet.Ministers are regularly interrogated by C B I & ARRESTED ALSO.Even top industralists are regularly visiting CBI HEADQUARTERS.
Barbarity of police is evident in Ram Dev case.
Scam or Scandal is daily upper page news.
I do not think a genuine investor or industrial house will rely on such governance.
Every issue is being dealt through Judiciary.Parliamentary democracy of coalition is clearly farce but Govt. is suviving by appeasement. buying necessary majority for survival.
Nobody bothers of rising prices of vegetables.essential commodities, fuels etc.
Govt. is proud of a Honest PM .
Kalyan Ghosh
Jul 12, 2011I do believe that India is a place for long term investors. India, however needs to do something urgently to address all the issues identified by you-infrastructure , governance , tax and labour reforms ,etc. I live abroad in a small country and let me tell you that I am so happy to live here because all laws and rules and regulations are so simple and easy to understand and follow.So the most important thing India needs to do is to simplify everything.Simplification is the key.But I still have very good hope for India, when I compare it to Europe and USA.