“Overheating India is the new cool” – Excerpts

Came across this recent article exploring all the talk about an overheating economy…

Excerpts:

“…Here is what Balaji wrote in response (to a blog entry about overheating India):

“…When it comes to India, perceptions rule rather than the actual statistics. Indians whine that there is very great income disparity. Take a look at the gini coefficient and India has much lesser disparity than most countries*** in the world including US & China.

So, if people are allowed to comment on a nation’s health just by the perceived lack of facilities in the airports and cheap offices, then India is surely overheated.

Look beyond the narrow perceptions, and you will see what drives a group that starts the highest number of companies in Silicon Valley, that occupies top executive positions in major boardrooms of the world, that excels in the world’s top universities. And no, India is not propelled by oil & tin & Wal-Mart products. So, any comparison with Brazil, China & Russia is not warranted…”

Balaji then pinpoints the underlying factor sustaining the Indian growth story…something which I think is often ignored but is probably India’s greatest asset and strength – its HUMAN CAPITAL.

“…In a lot of ways, India’s strength is similar to that of early America. English, Movies & Democracy are just one part of the game. But, the biggest part is that both countries place their thrust on its entrepreneurs. This is where India’s long term future is. If this one is set alright, all the remaining including lack of infrastructure can be set right.

An example is the Telecom infrastructure. Just a few years ago, India had a highly pathetic telecom sector with the lowest teledensity. Enter Mittal, Reliance, Birlas, Tatas to compete with state majors, now it is on its way to become one of the world’s top telecom sectors. Growth is fastest, coverage is excellent and services are increasing day-by-day.

Thus, currently Indian infrastructure might be shabby. But, it has some of the best Indian business minds working on it, including the Tatas & Reliance, Essar, Jindals. Railways & Aviation have already clocked significant change and roadways/ports/power would follow suit, in light of a lot of developments happening currently including the India’s nuke deal.

In the long run, lets see how any body makes money by betting against India and all those overheating pessimisms.”

Footnotes:
* See Nanubhai Desai’s comment on this topic which he starts by saying, “I didn’t know whether to laugh or cry when I saw the cover of the new issue of The Economist”…and this comment by Edward Hugh (on the same topic) in which he says, “The Indian phenomenon is a huge one. India will quite simply become the biggest developed economy ever (the only real debate is about when), and since India is the planet’s most populace country, and global population sometime later this century will start to turn south, India will become a unique phenomenon, there will never be the like of this again..”