|» INVESTING IN INDIA|
In an incredible story that defies "journalism" but typifies what New York City stands for, the New York Times (May 4th) carried a "front page" website article: "India, starved for investment".
The article begins with a powerful and colourful opening "Sumit Sapra is a member of that ambitious, impatient generation of young Indians who rode the crest of the global economy. In five years, he changed jobs three times, quadrupling his salary along the way. Even when satisfied with his position, he kept his résumé posted on job sites, in case better offers came along. And he splurged. In three years, he bought three cars, moving up a notch in luxury each time. For weekend jaunts, he bought a motorcycle."
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The article then rues the downfall of Mr. Sapra who, "armed with a prestigious degree", has been laid off and now will not have his multiple job offers awaiting him each time he opens his email inbox.
From the decline of this individual's excessive lifestyle, we are taken to the cranes of Gurgaon where, "A few short years ago, construction sites here buzzed 24 hours a day, crews working through the night, cramming down food from onsite trucks during breaks in the twilight. Now real estate sites lie fallow. The once-booming art market has slowed to a crawl. And charmed professionals with coveted degrees, like Sumit Sapra, are unemployed or taking pay cuts to hold on to their jobs".
(It has come to our notice that the facts pertaining to Sumit Sapra were not cross-checked with Mr. Sapra. And he seems to have been mis-portrayed. I know this now because Mr. Sapra emailed us with his response that the NY Times did not cross-check the facts with him. I had relied on what the NY Times had written, assuming that the "facts" were cross-checked.)
India needs foreign capital, muses the article, and there was a lot of it around. Now, all those who believed that India was sheltered from the global economy have to eat humble pie. India is crumbling and India desperately needs foreign investment.
To prove this point the article then turns our attention to DLF - the symbol of progress in the blurry eyes of the New York Times "DLF turned to foreign lenders and investors like D. E. Shaw, the New York-based investment firm, because they provided money "at lower rates of interest and in larger amounts," said Rajeev Talwar, an executive director at New Delhi-based DLF. "Today, you have no choice but to go to the Indian banks."
DLF - like Unitech and a host of other developers - are stuck in debt which they cannot repay. Even though they were obtained at "lower rates". "Cheap" has suddenly become "expensive". Because the markets have turned and the "land banks" are now good for letting cows do what cows do best on land: irrigate the soil.
But the real insult comes in the ending "Today, you have no choice but to go to the Indian banks".
The cheek of it all!
If I was the Indian bank, I would ask for my money back.
And send DLF off to the haven off crony capitalism - New York City - with hat in hand.
Foreign capital not foreign punters
I agree. India needs more private investment and probably more foreign capital.
India does not need to "loosen regulation" to get its animal spirits going, as another economist pointed out. What India needs is to enforce regulation that punishes the crooks. Knowing that there is one law that works for all will allow all the animals to come out - without being scared of the lions, the hyenas, and the loan sharks.
India needs long term capital for sure - including foreign capital - and a more transparent business environment that is not scared to shut down the crony capitalists.
But, yes, India does need rotten stories like the one just carried by the New York Times to remind us what we do not need - an elegy for greed and worship of Mammon.
May New York and London retain their unchallenged crowns as the cities which bred, fed, and bed the crooks. And glorified them.