Clearly, with a resounding win with what the exit polls suggest, it seems like a third term for the Modi government with a stunning victory. How do you read about exit poll predictions?
Look, what I can say is that exit polls differ from each other and from the actual results very much. And this is happening not only in India, but also in other countries. In America, for example, they think John Kerry will beat Bush. Turns out that’s not the case. They thought Hillary Clinton was going to beat Trump, it turns out that wasn’t the case. So, I would say it is pure gambling. If you invest on the basis of exit polls, I suggest you hold a little money until you actually get to the right results. Now, what will happen if, in fact, the NDA will come back with the possibility of increasing the total amount? As far as I can see, it will be a sign of continuity. The market will say that this is Modi’s promise. What after all Modi’s manifesto says? What is the promise of all kinds of radical new changes? No, promise more than the same.
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He said Mr. Modi has done good for you and Mr. Modi assured me now I will give you more. So, if they are going to offer more, then I see, the market should be happy. Now, there are bound to be some people who will argue that Modi has so much political capital, why is he not doing agricultural reforms, land acquisition reforms? I am afraid that things are so difficult politically that I don’t see Mr. Modi trying to tackle such a difficult topic again. So, if you get more, I would say that you have just finished the year 8.2% GDP growth, finished, finished way above all expectations, I remember the beginning of the year optimistic like the chief. economic advisers say we can do 6.5, some pessimists say 5.5.
Now I understand that there is a difference between GDP and GVA. Even GVA to go by 7.2 in this situation, I would say this is really a very good achievement.
I will throw the rest of the ingredients in the melting pot. If you look at Modi 1, there are big ticket reforms implemented in the area of ​​financial inclusion. Jan Dhan, UPI launched. Modi 2 is all about making India more Atmanirbhar, defense, manufacturing, China plus one, PLI scheme. What do you think could be a remarkable reform or a Modi 3.0 push?
Look, Modi 2 was very interrupted by COVID, by Ukraine, and if you like last year it was interrupted again by El Nino. So, it’s a very difficult time. Modi soldier through and I will say that now three years in a row, you have more than 7% growth, in the first year I will ignore it because it is the recovery from COVID. But in the next two years if you have done well, when some other countries, look at all our neighbors, Pakistan with the IMF, Sri Lanka with the IMF, Bangladesh whose GDP is the same as ours. , Bangladesh with the IMF. And we rock solid and do 8.2. So, Mr. Modi would say, there may be certain reforms that fail.
He failed to persuade the farmers that we had to change the whole farming system and there was a huge farm revolt against him. He stepped back and said, Okay, I’m not going to take this.
In Modi 1, he, for example, tried to take land. He retreated. Again, in Modi 2, one of the things that he has backed off might be whether we have citizen registration, which the Muslim community is afraid of, which is a non-economic subject. But my point is, these are some of the areas where Mr. Modi has shown that he can back down when faced with serious opposition.
But they will move forward and will be very happy with what happened. I’ll just say this. In some ways he has been lucky. I wrote a column the other day saying, India’s greatest achievement, not Modi’s greatest achievement, India’s greatest achievement in this Modi era is the rise of a global center of capability.
According to various estimates from various sources, today we have up to 4,000 multinational companies with a total revenue of more than 100 billion. These guys export huge quantities and have saved our pork.
If you look at the merchandise trade deficit, it’s a huge amount. But we have been saved by the export of services, especially GCCs. However, Mr. Modi is not the man responsible for the rise of global centers of capability.
It’s just globalization. All over the world, people are walking around saying, where can I get the best brains because I need the best brains for this high-tech society and you will find that India, second only to China, produces the most STEM graduates a lot, 2.3 million, I believe, every year, which engineers at least half a million or 600,000.
So, they came to India not only for cheap work. They started coming to India for top jobs and now for R&D. There is one Deloitte report that suggests 42% of men involved in the GCC are in engineering R&D.
More recent ones say they are artificial intelligence. So, multinational companies all over the world started taking India as their R&D hub. Indian companies have never been good at R&D. They don’t do much R&D. But India has become an R&D hub due to globalization and entry of MNCs.
So, this in my mind is a very positive thing. Meanwhile, Mr. Modi is trying to move forward with something like PLI, a productivity-linked incentive for manufacturers.
Let’s be frank. I mean, when Apple came in, nothing happened. They budgeted about $26 billion for PLI. The actual disbursement is only one billion so far. You will say you will take it. There is promise in one sector here. But overall, it didn’t change India much.
What has changed India is the cumulative reform process that has taken place over the last 30 years, plus, I would say, the rise of the GCC, without which we would have had serious problems with the balance of payments and they have. it is now a nurturing ground for the kind of high-tech scientists and engineers that won’t stay in the GCC. They will also come out and join forces with Adani, Ambani, Tata, and others.
I will just say this, there is a feeling among many people who are afraid to say, I did not vote for Modi. There are many people who say, so be careful about polls because people who voted against Modi may not respond to you, you may lose or people may deliberately say, I voted for Modi when I wasn’t. So, I would say, at this particular time, we still have to make allowances for the fact that the actual results may be very different from what the polls say. So, let’s hold the horses. Let us not come to the conclusion that the exit polls are accurate and let us come out with our real views after the real results will come.
