In 2024, it’s Modi vs Modi… weaponisation of agencies a concern: Ruchir Sharma at Express Adda

“What he (Narendra Modi) will want and what the BJP will want is for them (Opposition) to prop up a face. The moment you do that, Modi looks so much better. So, the best hope for them is Modi vs. Modi…it’s a referendum on him and his policies, and there is no one else who is up there,” Sharma said.

Ruchir Sharma, Chairman of Rockefeller International and Founder of Breakout Capital, at the Express Adda. (Pradip Das)

According to him, a country cannot be successful if domestic businesses are bearish. “I think there is fear (among domestic businesses), undoubtedly. Both economically and politically, if there’s one thing, which should be concerning for the Modi government, it is the weaponisation of investigative agencies,” Sharma said.

Sharma was in conversation with Anant Goenka, Executive Director, The Indian Express group, and Shyamal Majumdar, Editor, Financial Express.

He said the best prediction of crises is when the domestic businessmen start taking out money before foreign capital leaves. “Often the foreign capital is the last one to come and catch the tail end of the boom. The first to leave happens to be the domestic guys,” Sharma, an author, investor and political commentator said.

Singer Anu Malik during Express Adda in Mumbai. (Pradip Das)

When asked if there was one advice he would want to give the Prime Minister, Sharma said, given what’s happening in the Indian ecosystem, his concern was if the PM was getting frank objective advice. “…because there is a tendency sometimes for everyone to just be a sycophant, suck up and say everything is good. So, I just hope there is some objectivity on the ground also which he is getting from the ecosystem,” he said.

Ruchir Sharma in conversation with Anant Goenka, Executive Director, The Indian Express group, and Shyamal Majumdar, Editor, Financial Express. (Pradip Das)

“Okay, you want to use the investigative agency to go after the political (parties), fine. But how are they misusing their power then to basically run rampant with lots of people and undermining business confidence. Who is saying that… Is somebody giving feedback? That’s my big concern today,” Sharma said.

When asked whether a Narendra Modi-led government at the Centre with the Opposition ruling majority states was a good combination for the country, he said the balance has worked out fine for India as there are checks and balances. Sharma said India is currently facing the fourth wave of foreign capital inflows since the 1991 economic reforms. However, he cautioned that the domestic stock market is the most expensive in the world and the valuation of companies is very high.

Ruchir Sharma at Express Adda in Mumbai. (Pradip Das)

Sharma said India’s growth currently is driven by the service sector and less because of the manufacturing sector. “In India’s case, the manufacturing growth has been there but much slower. The high growth has to come from the manufacturing sector,” he said. For India to make it to the next level of growth over the next five years, investments need to pick up, he said.

He lauded the Narendra Modi-led government’s digitisation efforts, which fostered a growing digital economy in India. “The way digitisation has been embraced is definitely something which has propelled India and the markets ahead,” he noted.

To a question on the impact of the Hindenburg Research report, which accused the Adani Group of brazen stock manipulation and accounting fraud, on foreign investors, he said there was a brief setback which got absorbed quickly.

During the event, Sharma said India’s growth currently is driven by the service sector and less because of the manufacturing sector.  (Pradip Das)

He said he believes the Indian market is very diverse and its ability to move on is far more pronounced than any other market. India has been generating quality companies that are giving investors very good returns. “Compared to other markets, India’s advantage has always been the number of good quality companies you can invest in. Even the size is meaningful. As the share of the overall market, India is possibly the highest in the world where the number of companies have generated returns of 400 to 500 per cent,” he said.

The audience at Express Adda. (Pradip Das)

Sharma has authored many books including the best seller ‘Breakout Nations: In Pursuit of the Next Economic Miracles’. The title of his next book is ‘What went wrong with capitalism’.

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