I finished Billionaire Raj.
The author continues with his main theme that all of India’s challenges can be attributed to inequality. If only the government were bigger and less corrupt, India would turn into a larger scale version of Singapore. Also, since Hindus are violent and threatening while Muslims are peaceful and threatened, another way to improve India would be for the big government to require everyone to convert to Islam, thus eradicating the scourge of Hindu nationalism.
There is an important message for investors buried in here. The author points out that China is a unique story and investors shouldn’t count on that story being replicated in India. He notes that Brazil was growing wildly and apparently sustainably in the 1980s… and then it wasn’t. An Indian future of overpopulation, pollution, and poverty is at least as likely as a China-like middle class society developing.
When I mentioned this book to a global investor friend, he responded with “India is the most corrupt place that I’ve ever seen.”
India as a great investment idea is unlikely. There is a lot of academic research showing that high growth rates are not reflected in high stock market returns. There are probably a lot of reasons for that including that the growth is already priced in to the share price, that attractive businesses are not listed, that foreigners are unlikely to reap the benefits. India is also a difficult place for a lot of reasons including the corruption, bad government, dispersed power in the States, and that India is not really a country — but an amalgamation of countries with different languages and traditions. So if the PM gives a speech in Delhi there is no language he could speak that 50% of the country would understand. On the other hand India has a middle class of around 300 m people & has accomplished an enormous amount in the last several decades so it is hardly a country to be looked down on. It is just dubious that an excess amount of this growth will accrue to foreign portfolio investors.
The mantra of the 1990s-2000s was to find the cheapest people in the world to “do the job” and then hire them in country. This from a time that Indian community colleges taught computer programming literally “on paper”. There were no computers in classrooms to learn. The average experienced Indian developer makes $10 an hour, and the new graduate makes $5. Even in 2019, personal computers are a luxury. The 2020s will probably shift to AI and more automation, so less “low level” resources will be needed, not good for India unless you’re in one of the 5 top tech US cities.
India has a national average IQ in the 80s and no hydrocarbon energy resources. It’s doing as well right now as it will ever do in human history.
India vs. China was big news, 20 years ago when John Kerry was campaigning for higher tariffs & closed borders while Dubya was campaigning for outsourcing. We all thought India would become the world’s superpower since they had the best education & Dubya was winning.
Religious indifferences and corruption do prevail in India and eradicating these would be next to impossible. Although the foreign investments including Apple(1), Cisco(2), Huawei, Kia Motors has been all-time high aligning with the GDP growth. The mobile computing revolution has placed India as one of the largest smartphone industry in the world in turn impacting and luring Amazon(3) and Walmart(4) to the flourishing market of India.
(1). https://www.livemint.com/industry/manufacturing/mass-production-of-iphones-to-start-in-india-1555317238257.html
(2). https://m.economictimes.com/tech/software/cisco-to-step-up-investments-in-india/articleshow/65806728.cms
(3). https://www.cnbc.com/2019/08/21/reuters-america-amazon-opens-its-biggest-global-campus-in-india.html
(4). https://techcrunch.com/2018/08/20/walmart-flipkart-deal-done/