‘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
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.