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India will overtake China in the next 25 years: Rakesh Jhunjhunwala
This is going to be Indias decade and may be the first of many, says the ace investor.
You may agree to disagree but I think this decade belongs to India both in terms of growth and in terms of ideation. It looks like things are falling into place, aren't they?
Hopefully. The early indicators are very positive and we do not have to sell ourselves saying America has got a lot of Covid cases and we have fewer cases. The common contention is our figures are fudged. But 27 state governments are giving these figures, not the central government. It can’t be that all the 27 states have come together to fudge the figures. We have little faith in ourselves.
What makes societies is skills and democracy. We are among the most skilled people in the world and we have seen a lot of changes in the last 8-10 years and the government has made promise of further reforms. There is no question that this is going to be India’s decade and may be the start of India’s manifold decades. I also feel that after the recent announcements on privatisation, there would be further liberalisation of the economy.
People talk of socialism and capitalism. I talk of realism and the realism is that the more you open the economy, the more prosperous we get. When Mr Agarwal bought
Hindustan Zinc
NSE -1.48 %, its profit was not even Rs 200 crore. Today the profit is Rs 7,000 crore.
I am very hopeful that we are going to have growth with social justice. We abolished the kerosene subsidy for most households in India to avail LPG. We have electrified most villages in India, A lot has been done to get tap water to the masses. Indians regardless of class and wealth have access to clean water.
The Budget was very growth-oriented, very transparent with talk of privatisation. Do you think there is a very distinct shift in the government policy making?
Is there any doubt?
Which is the one policy you are excited about?
The only way to eliminate poverty today is growth. People think that the poor have not benefited. My help at home now has got an identity thanks to the Aadhaar Card. I could get a passport for him. For 11 months, he works for me and one month, he goes to his children. Ten years earlier, he could not even talk to his children. Today, everyday he has video calls with them. So the quality of life has improved for the people who are underprivileged. I personally feel we are going to have growth with social justice. The constant efficiency that the government is bringing and the disbursement of food grain or electricity subsidy is unbelievable. Once the electricity reforms go through as proposed by the government, what a kicker to the economy it would be!
The Covid crisis is unfortunate but it has also changed things radically. The government introduced aatmanirbhar programme, PLI schemes and are now able to spend not caring about the rating agencies?
I do not think these changes came because of Covid. Modiji is a very careful man. These changes were going to come Covid or no Covid. I have described Mr Modi as a distilled socialist. A socialist who wants a larger part of the cake for everybody. The distilled socialist also wants that but first you have to increase the size of the cake. Mr Modi realises that without economic reforms, we cannot increase the size of the cake. I have no doubt that the reforms will be implemented and will come in spite of the Covid.
The government is saying that they only want to be in the business of strategic sectors. Are you getting a sense that this time, disinvestment could create many Hindustan Zincs and many Marutis?
Absolutely, there is no question about it. And this is privatisation. There is scope for a lot of efficiencies in the public sector companies. I do not blame the public sector employees or the public sector because everybody wants to work for an organisation which has pride, which is well known, which is well looked upon. Now for whatever reasons, there are a lot of problems in the public sector. They are just not able to transmit a sense of belonging and pride to the employees and as a result, they are not able to give their best. And you may call me a fool, you may call me anything, I may not live to see it but I can tell you one thing – India will overtake China in the next 25 years.
Every 10-15 years, the order changes. It was Japan, then came to America, then China. It was dominated by America for the last 10 years. Is this going to be that year when we will surprise everybody?
Not this decade, many decades. A lot of the countries are export oriented. Export-led growth can last for a time. It comes fast. But for it to sustain over a period of time is not easy. Countries which grow on their home consumption have got a much safer way to reach lasting growth.
Markets and earnings have made a comeback. Demand has also made a comeback. What has surprised you more – the market comeback or the demand comeback?
Well the market comeback would not have been possible without the demand comeback. The market is an amalgamation of so many factors. The biggest factor I feel is that there is so much disbelief today. As long as there is disbelief, markets will keep moving up.
