Modi 2.0 puts India in a sweet spot, boosts economic growth: IIFL’s Nirmal Jain EXCLUSIVE

Published: May 23, 2019 7:00:20 PM

A government with a clear majority like this can take bolder steps and continue with the reforms, which is also positive for the markets, because, when the economic conditions are good the market does well.

A stable mandate also makes the India story attractive for global investors, said IIFL chairman Nirmal Jain.

By Nirmal Jain

This mandate is very good to boost economic growth as well as address the slowdown issues. A government with clear majority like this can take bolder steps and continue with the reforms, which is also positive for the markets, because, when the economic conditions are good the market does well. Also you can take positive markets to drive growth, because the government can capitalise on this and take steps like raising capital to repair bank balance sheets and privatise etc.

A stable mandate also makes the India story attractive for global investors. There are lot of foreign capital sitting on the fence, particularly because China is slowing down and also investors are wary of Chinese policies and the outcome of the long-drawn-out trade war between US and China. Stable government like this will also encourage friends like Japan to invest more in our country. India, at this point of time is at a sweet spot to attract lot of foreign capital not only in terms of capital markets but also in terms of foreign direct investment and that can give impetus to growth.

Stable government could take bolder decisions regarding reforms, fiscal deficit or how to look at things from a longer perspective. This would help to revive growth, revive investment in infrastructure and address liquidity issue in non-banking finance sector.

From a longer perspective India is very well placed to outperform other emerging markets as well as global markets. If you see the last three four days the flow has become positive but most investors were waiting for the clear mandate and then they can allocate more money. We would also see a lot of money flowing into emerging markets ETFs. The ETFs which are run by large fund managers have significant corpus for emerging markets. The money moves with events like this. If you look at a three-five year perspective, then I am sure our markets will do very well. Investors with medium-to-long-term perspective will do well. At this stage investors should build a portfolio with India story revival in mind.

This mandate is very good to boost economic growth as well as address the slowdown issues. A government with clear majority like this can take bolder steps and continue with the reforms, which is also positive for the markets, because, when the economic conditions are good the market does well. Also you can take positive markets to drive growth, because the government can capitalise on this and take steps like raising capital to repair bank balance sheets and privatise etc.

A stable mandate also makes the India story attractive for global investors. There are lot of foreign capital sitting on the fence, particularly because China is slowing down and also investors are wary of Chinese policies and the outcome of the long-drawn-out trade war between US and China. Stable government like this will also encourage friends like Japan to invest more in our country. India, at this point of time is at a sweet spot to attract lot of foreign capital not only in terms of capital markets but also in terms of foreign direct investment and that can give impetus to growth.

Stable government could take bolder decisions regarding reforms, fiscal deficit or how to look at things from a longer perspective. This would help to revive growth, revive investment in infrastructure and address liquidity issue in non-banking finance sector.

From a longer perspective India is very well placed to outperform other emerging markets as well as global markets. If you see the last three four days the flow has become positive but most investors were waiting for the clear mandate and then they can allocate more money. We would also see a lot of money flowing into emerging markets ETFs. The ETFs which are run by large fund managers have significant corpus for emerging markets. The money moves with events like this. If you look at a three-five year perspective, then I am sure our markets will do very well. Investors with medium-to-long-term perspective will do well. At this stage investors should build a portfolio with India story revival in mind.

The author is founder and chairman of IIFL Group. The views expressed are author’s own.

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