Shankar Sharma says too much FDI in some sectors is a mistake

[fsayed]

@nair @proud_indian @Roybot @jbgt90 @Sergi @Water Car Engineer @dadeechi @kurup @Rain Man @kaykay @Abingdonboy @SR-91 @nang2 @Stephen Cohen @anant_s

@jbgt90 @ranjeet @4GTejasBVR @The_Showstopper @guest11 @PARIKRAMA

@GURU DUTT @HariPrasad @JanjaWeed @litefire @AMCA @SrNair
@Nilgiri @Jamwal's
@Guynextdoor2 @DesiGuy1403

GET APP
News
Shankar Sharma says too much FDI in some sectors is a mistake
By Chiranjivi Chakraborty, ECONOMICTIMES.COM | 11 Jul, 2016, 12:36 hrs IST
Whatsapp
Facebook
Twitter
gplus
email
message
aPlus

Shankar Sharma believes long before Narendra Modi, Manmohan Singh and PV Narasimha Rao, it was Jawaharlal Nehru who did a much better job than his successors.
ETMarkets exclusive : The year was 1991. Manmohan Singh as the then finance minister, under his far-sighted prime minister PV Narasimha Rao, opened up the economy to private sector as well as foreign players, ushering in economic liberalisation in India.

25 years on, Prime Minister Narendra Modi, took that initiative to another level, unleashing a slew of unprecedented FDI reforms, which was delivered at a scale not seen since 1991. Under his regime, India received a record $51 billion in foreign direct investment (FDI).

But ace investor Shankar Sharma believes long before Narendra Modi, Manmohan Singh and PV Narasimha Rao, it was Jawaharlal Nehru who did a much better job than his successors.
Get doctors & more. Heal at home with Haptik
Ad Haptik

Speaking to ETMarkets.com through email, Sharma said former prime minister Jawaharlal Nehru's policy to emphasize on domestic ownership of foreign entities was a masterstroke.

"India got this right back in the days of Nehru, when we insisted on domestic ownership of the likes of Colgate and Unilever. Look at what a movement it has been. Else, we would have got all 100 per cent subsidiaries, like in many parts of the emerging world," he said.


"In my view, we have wagged our tail too much, and failed miserably in putting a price on our massive domestic market, the way China has done," Sharma said.

The Nehruvian policies on economic reforms after the Independence of the country were based on the principle of ensuring India's economic sovereignty, and enabling all-round domestic-focused development of industry.

After Independence, the FDI policy was designed keeping national interests in mind and with an aim to use FDI as a medium for acquiring advanced technology and mobilising foreign exchange.

The industrial policy of 1965 allowed MNCs to venture into India through technical collaboration. The government adopted a liberal attitude by allowing more frequent equity infusion.

However, faced with a massive balance of payments crisis in late 1990, the then government agreed to liberalise the economy to foreign players and capital in order to receive the aid given by IMF and the World Bank.

The reforms initiated in 1991 allowed foreign capital into many industries, which were then extended by the current government to almost all industries, including defence, which was hitherto banned.

"My firm belief is that India has opened up to FDI far too soon in many sectors to the detriment of domestic players," Sharma said, adding that, "Somehow, in India, if anybody says so, they (people who talk of protectionism) are labelled as being part of the Bombay Club."

Sharma believes one of the biggest mistakes of the past 25 years has been excessive opening up of the economy.

When asked what he would have done differently, Sharma said, "I would wall off certain sectors to FDI, while allowing freedom to portfolio money to invest in those sectors. In my view, that's been a huge mistake by our policy makers over the past two decades

http://m.economictimes.com/markets/...sectors-is-a-mistake/articleshow/53148634.cms

 

[Nilgiri]

"India got this right back in the days of Nehru, when we insisted on domestic ownership of the likes of Colgate and Unilever. Look at what a movement it has been.

Anymore wide eyed examples of Nehruvian socialism Mr Sharma?

 

[Manindra]

Anymore wide eyed examples of Nehruvian socialism Mr Sharma?

Vehicle Factory Jabalpur get CKD & SKD from AL & Tata, do substandard assembling & sell more costlier than OEM to IA.

 

[fsayed]

Anymore wide eyed examples of Nehruvian socialism Mr Sharma?

Hate is understandable but u can't deny the good or the truth and history will remains the same no matter how somebody tries to change it.

Dikhawe pe matjao apni akkal ladao

 

[Raul_AD]

Another Gem by Shankar Sharma.

http://www.business-standard.com/ar...make-money-shankar-sharma-116071100003_1.html

By when do you foresee a meaningful growth in credit offtake by India Inc?

I am convinced that meaningful credit growth is years away. No promoter I know has any interest in capital intensive growth anymore. They are shell shocked, with what’s been happening. People who have recovered from a high debt issue have sworn-off taking debt ever to fund growth. I have seen debt devastate family lives, deepen divides among family members. Which promoter in his right senses will go to a bank and ask for a loan?

And then, as a country and society, we are scaring off risk-taking by persecuting (Vijay) Mallya. A man who has made us proud as an Indian to have built one of the largest spirits companies in the world. And we chase this man away to London, on zero evidence of any fraud. Business is about risk taking. If a society discourages risk-taking by persecuting entrepreneurs, then we simply won’t get growth.

Here is a man who took a risk. It went bad. And lost almost everything he had. Still wants to pay back principal plus some interest. But we don’t want that. We want his blood, not money. What kind of lynch-mob perversity is this? I fear for genuine risk-taking in our society if this is going to be our attitude towards entrepreneurs.

 

[Nilgiri]

Hate is understandable but u can't deny the good or the truth and history will remains the same no matter how somebody tries to change it.

Dikhawe pe matjao apni akkal ladao

I wouldn't say Nehru's economic policies were all bad....but they were mostly pretty bad (with hindsight). I don't hate Nehru, just disappointed that our first leader just had to be a complete leftist and leave India with a bad breakfast.

 

[dray]

The proof of the pudding is in the eating......it's not difficult to see how we have done in pre-liberalization and post-liberalization era.

I wouldn't say Nehru's economic policies were all bad....but they were mostly pretty bad (with hindsight). I don't hate Nehru, just disappointed that our first leader just had to be a complete leftist and leave India with a bad breakfast.

Nehru's economic policies may look bad when we have the advantage of hindsight, but his policies were in line with the economic views of his time, and with a newborn country with little capital; he had little option. I think most damage was done to our economy by Indira Gandhi, and then we delayed the liberalization process for far too long.

 

[Nilgiri]

Nehru's economic policies may look bad when we have the advantage of hindsight, but his policies were in line with the economic views of his time, and with a newborn country with little capital; he had little option. I think most damage was done to our economy by Indira Gandhi, and then we delayed the liberalization process for far too long.

I would give Nehru the complete benefit of the doubt if he only saturated India with decent basic education (primary and start solidly on secondary coverage). That should have been the obvious hedge that is guaranteed money (nay gold!) in the bank, no matter how the economics may turn out....or are further smothered by future leaders (like his daughter)...since economics can be reversed and reformed as necessary once one system has been show to have failed.....but education is something you saddle an entire generation with....and it has many multiplier effects that are positive if it is addressed well....but equally negative if it isn't. Too much of the latter happened in India and is still happening because of that missed chance.

 

[dray]

I would give Nehru the complete benefit of the doubt if he only saturated India with decent basic education (primary and start solidly on secondary coverage). That should have been the obvious hedge that is guaranteed money (nay gold!) in the bank, no matter how the economics may turn out....or are further smothered by future leaders (like his daughter)...since economics can be reversed and reformed as necessary once one system has been show to have failed.....but education is something you saddle an entire generation with....and it has many multiplier effects that are positive if it is addressed well....but equally negative if it isn't. Too much of the latter happened in India and is still happening because of that missed chance.

That's very true.

 

[Grevion]

What he said is in line with the post-independence and pre 1991 era. India wouldn't have survived against a mighty China and the ever changing world geopolitics without the economic liberalization.
Plus it is due to the 1991 reforms that a huge chunk of people were driven out of poverty which was never done in the past 50 years before 1991.