Mark Mobius, Executive Chairman, Templeton Emerging MarketsGroup, is positive on India and believes the Indian economy is on a strong footing. “I can see India growing at 10% in the next few years if reforms continue to kick in,” he said in an interview with Business Standard. “We have $2 billion plus investments in India and we want to increase it,” he added.
Excerpts from the interview below:
The investment sectors of interest in India: “Given the fact that the country is growing and with the on-going reforms, banking is the obvious selection to begin with. And some of the conglomerates, companies that are involved in a number of sectors and getting a wider exposure of the markets will be another area. We also like technology and pharmaceuticals. We have a mix of both public and private bank stocks in our India portfolio.”
Two years of Modi’s Government: “The emphasis of the Modi government on the low income segment of the population is very good. I believe it not just a populist move but is also a key element in making the Indian economy healthy because you are creating a whole new generation of consumers and people who are becoming more productive. The Modi government’s emphasis on empowerment rather than hand-outs is very good.”
U.S. Federal Reserve is expected to increase rates; trajectory down in India; FIIs pulling money out of Indian debt. How do you see things playing out?: “This trend will continue. As long as you continue the reforms of the financial system in India and make it more transparent and efficient then rates will come down. If you see a more efficient productive society with less restrictions, your inflation will come down and interest rates will fall. This should have been done a long time ago. The emphasis of the government on the less fortunate segments of the society is very critical. The fixed income side will see some impact.”
Whether GDP growth of 8% is possible in India: “It (8% growth) is quite possible. I can see India growing at 10% in the next few years if reforms continue to kick in. I believe the numbers are reasonably accurate, give or take half a per cent.”
