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Old May 19th, 2014, 11:49 AM
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Exciting times ahead for India!

Narendra Modi's decisive victory is clearly a harbinger of good times. He is a hot blooded capitalist and the 'son of the land'. For the past 400 to 500 years, India has been subject to foreign rule and apathetic governments. Finally, we have a leader who has the vision and the wherewithal to deliver on the vision. He has the backing of a strong and powerful corporate lobby. His vision is global and inclusive. He isn't doling out freebies or pandering to the least common denominators in order to employ divisive policies.

Modi understands economics. Governments don't create jobs, businesses do. Businesses don't set out to create jobs. Businesses want to sell products and services to generate profits. Jobs are a byproduct of that process.

India doesn't suffer from lack of electricity or water or sanitation or food because it lacks technical or economic prowess. The problem is that these are capital intensive industries that require setting up economies of scale. This means, building factories or plants that have a 5 or 10 or 15 year return on investment. When governments are shaky, industries are reluctant to invest capital. The congress government were highly corrupt and bureaucratic and made this process even more difficult by changing the rules of the game midway in order to extract more money from businessmen.

With a clear majority, Modi can remove some of the obstacles and enable companies to invest. India offers great opportunity for aspiring businessmen and technologists. If there was ever an opportunity for an entrepreneur to become a billion, this is it!

In the next 5 years, India will churn out several more millionaires and billionaires. In 10-15 years, India will be completely transformed into a modern, forward-thinking country. Modi will not make it happen. The people will. Modi will simply make sure that the government doesn't impose unnecessary obstacles in the process.

From a government perspective, welfare will be reduced dramatically (hopefully, the paid Hajj visits will be scrapped), reservations will reduce, unnecessary taxes will reduce. Agricultural industry will be liberalized. Urbanization will be organized and tourism will flourish.

Infrastructure will improve dramatically. This will unleash a tsunami of growth. Agricultural productivity will improve, as there will industrialization of agriculture.

INR will strengthen. This will bring down food prices, but oil prices will remain elevated as oil subsidies will be cut. India will look for new trading partners and will eventually pair with US and EU.

Contrary to expectations, real estate prices may fall. Prices of real estate are artificially high because a lot of property is stuck in legal disputes and regulatory controls. With this administration, it is likely that a lot of prime real estate will be freed up, which will result in lowering property tax. Currently, real estate is a haven for money launderers and those who want to preserve capital. If the stock markets begin to rise, which they will, people will want to sell property to invest in stock markets. Even if real estate prices don't fall, they won't rise anywhere as much as other asset classes (such as gold or stock markets).

I would strongly encourage young Indians to become entrepreneurs and go with an open mind. Dream big and work hard!
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Old May 19th, 2014, 12:06 PM
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Re: Exciting times ahead for India!

Kallu Pai, Modi put your whole story in 5 words - Achchhe din aane wale hai.

BTW, dont hope for reservations to go so soon.

And also many have forgotten the changes on the lines mentioned between 91 and 96. In 91, i had to make some 6 trips to SBI to open an account and my friends said that in UCO bank, one guy was actually asking for a bribe to open an account (my experience was different - the response i got was - "sorry, we do not have any bandwidth for more accounts")

And it took 2 years for our family to get a Telephone (which itself was a big improvement over 10 years in 70s and 80s). Actually MMS in his 92 budget proposed scrapping fertilizer subsidy, which ultimately got rolled back and from what i know, still has not happened.

Some hard decisions could be -
1. Freeing the petroleum prices. This will mean reduction in petrol prices and big increases in LPG and diesel prices
2. Removing Fertilizer subsidies .

Either of the above will lead to large scale agitations.
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Old May 19th, 2014, 12:16 PM
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Re: Exciting times ahead for India!

I've been reading up and watching some videos about what all the Govt can and should do..

apart from the points by sgars pai.. I add -

- huge infra projects .. needed very badly .. India is far behind many smaller countries, remove the red tape and let all major countries come in like America, Brits, etc

- taxation needs to be simplified

- encourage business and investments, involve Indian diaspora .. most NRIs want to prosper in India and help out.

The Results of India's 2014 General Election - Brookings Institution

This video has some interesting takes by American analysts and their American perspective of next govt.. very good SWOT analysis at 47:50

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