‘Now is the Time to Deliver on Prom­ises, But I am Scep­ti­cal’

Modi has the man­date...whether he can solve all prob­lems, I don’t know, says guru

The Economic Times - - Markets -

BJP and its al­lies have been voted to power by In­dian elec­torate with ab­so­lute ma­jor­ity, and this has raised hopes among for­eign in­vestors. How­ever, leg­endary global in­vestor Jim Rogers, chair­man of Rogers Hold­ings and Bee­land In­ter­ests, in an exclusive in­ter­view with ET’s Biswa­jit Baruah, said he would rather re­main scep­ti­cal about the new govern­ment at the Cen­tre as there are se­ri­ous eco­nomic chal­lenges be­fore the new govern­ment. Edited ex­cerpts: Naren­dra Modi-led BJP has won the Lok Sabha elec­tions with a thump­ing ma­jor­ity. Do you think there will be a ma­jor change in global in­vestors’ sen­ti­ment to­wards In­dia? In­dian mar­kets were very ex­cited about the elec­tions for the past sev­eral weeks. The bench­mark in­dices have ral­lied nearly 20% in this pe­riod on an­tic­i­pa­tion of a favourable po­lit­i­cal out­come. Modi is a bet­ter man than many other politi­cians in In­dia, but whether he will be able to deliver things as promised, I am scep­ti­cal about be­cause there is a huge bu­reau­cracy in the sys­tem and op­po­si­tion from politi­cians. I sincerely hope that things change in In­dia, but I am scep­ti­cal as politi­cians have been promis­ing for the last 25 years and noth­ing much has changed. What are your ex­pec­ta­tions on re­forms from the next BJP-led govern­ment? I don’t see much of any­thing com­ing from the next govern­ment. But, if Modi de­liv- ers on his prom­ises, it will be bet­ter. He has de­liv­ered in Gu­jarat, but I don’t know how he will per­form at the Cen­tre. What would be your ad­vice to in­vestors for a mar­ket which has ral­lied sharply over the past few months. Should one par­tially book some prof­its? Nor­mally, when mar­kets move as per an­tic­i­pa­tion, one should sell as an ex­pres­sion in fi­nan­cial mar­kets -- buy on ru­mours and sell on news. In­vestors have been buy­ing for the past sev­eral weeks in an­tic­i­pa­tion of a favourable po­lit­i­cal out­come, thus many in­vestors will sell now be­cause that’s tra­di­tion­ally been the right thing to do. If, I were an In­dian, I would prob­a­bly sell into this kind of ex­cite­ment be­cause mar­kets have an­tic­i­pated this event. Now, the mar­kets will con­sol­i­date and may go down for a while from cur­rent lev­els be­fore ris­ing again. I am scep­ti­cal about In­dia be­cause I have seen In­dian politi­cians for decades. What are your con­cerns that the new govern­ment should ad­dress first? I hope some ex­cit­ing things will hap­pen go­ing for­ward. One must re­mem­ber, when Man­mo­han Singh came to power, he promised all sorts of ex­cit­ing and won­der­ful things, but that did not hap­pen for what­ever rea­sons. I hope Modi does deliver on his prom­ises be­cause he has the power and the man­date. Ev­ery­one knows that In­dia has been badly man­aged for decades. There are con­cerns about in­fla­tion, trade deficit, high debt-to-GDP ra­tio. Whether Modi can solve all these prob­lems, I don’t know, I am still scep­ti­cal. Do you think In­dia can re­ceive higher for­eign fund flows this year com­pared to an aver­age run rate of $20-25 bil­lion in re­cent years? Yes, In­dia can re­ceive higher flows this year if the govern­ment does some of the ex­cit­ing things as promised and makes nec­es­sary changes to push eco­nomic growth. Let’s see whether the new govern­ment de­liv­ers on those prom­ises. What poli­cies are re­quired at the Cen­tre to at­tract for­eign in­vest­ments? If In­dia makes cur­rency con­vert­ible and opens the mar­kets to all in­vestors, where any­one can bring money in and take it out, then only I would get ex­cited.

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