1 00:00:00,360 --> 00:00:04,200 Speaker 1: Modi has to contend with two chambers of Parliament, twenty 2 00:00:04,280 --> 00:00:08,959 Speaker 1: nine state governments, and a fiercely independent judiciary that thinks 3 00:00:09,000 --> 00:00:12,920 Speaker 1: nothing of tossing out key government decisions such as who 4 00:00:12,960 --> 00:00:16,960 Speaker 1: to cell phone licenses get awarded to. So, Dan, are 5 00:00:16,960 --> 00:00:26,400 Speaker 1: you saying that there's maybe too much democracy in India? 6 00:00:27,720 --> 00:00:30,160 Speaker 1: This episode is brought to you by Needex, the Binary 7 00:00:30,160 --> 00:00:33,320 Speaker 1: Options Exchange. Binary Options let you limit your risk and 8 00:00:33,400 --> 00:00:36,320 Speaker 1: trade stock in disese, commodities, forex and more from a 9 00:00:36,360 --> 00:00:41,120 Speaker 1: single account. NDEX is a CFTC regulated exchange with transparency, 10 00:00:41,159 --> 00:00:44,920 Speaker 1: free market data, and fairness guaranteed. The future of trading 11 00:00:44,960 --> 00:00:47,720 Speaker 1: is here now at n A d e X, dot 12 00:00:47,800 --> 00:00:50,599 Speaker 1: com futures, options and spots. Trading involves risk and may 13 00:00:50,600 --> 00:00:57,960 Speaker 1: not be appropriate for all investors. Hi, and welcome back 14 00:00:57,960 --> 00:01:01,800 Speaker 1: to Bloomberg Benchmark, a podcas pasked about the global economy. 15 00:01:02,080 --> 00:01:07,200 Speaker 1: It's Thursday, February. I'm Daniel Moss, Executive editor for Global 16 00:01:07,280 --> 00:01:10,440 Speaker 1: Economics in New York. I'm joined by my co host, 17 00:01:10,480 --> 00:01:14,680 Speaker 1: Aki Eto, the acting Tokyo Bureau Chief. Aki Good evening, 18 00:01:15,040 --> 00:01:18,640 Speaker 1: Hi Dan, how are you? I'm pretty good? Thanks. You know, 19 00:01:18,800 --> 00:01:21,480 Speaker 1: we were thinking it's about time we took benchmark on 20 00:01:21,520 --> 00:01:26,120 Speaker 1: the road again and talked about about India. It's often 21 00:01:26,200 --> 00:01:29,720 Speaker 1: compared with China as a rising economic and political power, 22 00:01:29,760 --> 00:01:33,800 Speaker 1: yet probably receives a fraction of the column inches or 23 00:01:33,880 --> 00:01:37,720 Speaker 1: airtime that China gets, and when it does attract attention, 24 00:01:38,200 --> 00:01:41,920 Speaker 1: it's often in the context of natural or man made disasters. 25 00:01:42,120 --> 00:01:46,480 Speaker 1: And yet there's a compelling economic story to be told. Aki, 26 00:01:46,560 --> 00:01:49,080 Speaker 1: you probably know India has a ton of people. It 27 00:01:49,200 --> 00:01:53,280 Speaker 1: actually has almost one point three billion, and by the 28 00:01:53,400 --> 00:01:57,280 Speaker 1: end of two which is not that far away, according 29 00:01:57,320 --> 00:01:59,640 Speaker 1: to the u N, it will have more people than 30 00:01:59,760 --> 00:02:02,800 Speaker 1: China in it. It was also the fastest growing major 31 00:02:02,880 --> 00:02:06,200 Speaker 1: economy in the world last gear, clocking in at seven 32 00:02:06,240 --> 00:02:10,520 Speaker 1: point three That easily beat China's six point eight percent 33 00:02:10,639 --> 00:02:14,079 Speaker 1: and was streets ahead of, say, the US, which grew 34 00:02:14,080 --> 00:02:18,640 Speaker 1: at about two pc. India is also a major manufacturing 35 00:02:18,720 --> 00:02:23,920 Speaker 1: center for the auto industry, for engineering equipment, for electronic components. 36 00:02:24,240 --> 00:02:29,280 Speaker 1: It has a huge software industry and a vibrant services sector, exporting, 37 00:02:29,320 --> 00:02:33,480 Speaker 1: among other things, Bollywood. So I guess there's a lot 38 00:02:33,520 --> 00:02:38,160 Speaker 1: of potential here but also some disappointment. So about two 39 00:02:38,240 --> 00:02:42,000 Speaker 1: years ago, I think Prime Minister Moody was elected on 40 00:02:42,040 --> 00:02:46,280 Speaker 1: a platform of economic opening and reform. His bj B 41 00:02:46,520 --> 00:02:49,880 Speaker 1: party scored one of the biggest ones ever and it 42 00:02:49,919 --> 00:02:53,160 Speaker 1: was a pretty exciting moment. But his administration has come 43 00:02:53,320 --> 00:02:56,240 Speaker 1: under a lot of fire for really not moving fast 44 00:02:56,360 --> 00:03:00,280 Speaker 1: enough on these reforms. The federal budget, which is sold 45 00:03:00,360 --> 00:03:03,720 Speaker 1: for release next week, offers the chance of a reset, 46 00:03:03,880 --> 00:03:07,920 Speaker 1: a chance to align policy priorities with the vision that 47 00:03:08,080 --> 00:03:12,400 Speaker 1: was sold for a more productive, a more dynamic, business 48 00:03:12,440 --> 00:03:15,440 Speaker 1: friendly India. It's not an easy place to govern. Let's 49 00:03:15,480 --> 00:03:18,000 Speaker 1: go back in time for a moment. The election of 50 00:03:18,040 --> 00:03:21,840 Speaker 1: the Modi government was a very big deal. The whole 51 00:03:21,880 --> 00:03:25,520 Speaker 1: series of front page stories in big American papers, this 52 00:03:25,600 --> 00:03:29,359 Speaker 1: sense that the rest of India would become like Gudge right, 53 00:03:29,560 --> 00:03:32,440 Speaker 1: that's the state north of Mumbai that Modi ran as 54 00:03:32,520 --> 00:03:35,680 Speaker 1: Chief minister. Chief Minister is kind of like a governor 55 00:03:35,720 --> 00:03:38,840 Speaker 1: in the US. India would be open for business, the 56 00:03:38,920 --> 00:03:43,880 Speaker 1: shackles would be freed, well, not so fast. Unlike China, 57 00:03:44,440 --> 00:03:48,320 Speaker 1: Modi has to contend with two chambers of Parliament, twenty 58 00:03:48,400 --> 00:03:53,080 Speaker 1: nine state governments, and a fiercely independent judiciary that thinks 59 00:03:53,120 --> 00:03:57,040 Speaker 1: nothing of tossing out key government decisions such as who 60 00:03:57,080 --> 00:04:01,040 Speaker 1: to cell phone licenses get awarded to So, Dan, are 61 00:04:01,080 --> 00:04:04,120 Speaker 1: you saying that there's maybe too much democracy in India? 62 00:04:04,640 --> 00:04:07,480 Speaker 1: I would never want to say there's too much democracy anywhere, 63 00:04:07,520 --> 00:04:10,760 Speaker 1: but there are some things holding the country back. Joining 64 00:04:10,840 --> 00:04:13,560 Speaker 1: us from our bureau in New Delhi is Uni Krishnan, 65 00:04:13,960 --> 00:04:18,280 Speaker 1: who covers economics and government in India. Uni Hi Hi 66 00:04:18,400 --> 00:04:22,119 Speaker 1: Dan Hiarchy, Hey, when you welcome to the show. I've 67 00:04:22,480 --> 00:04:27,080 Speaker 1: heard that you've met Prime Minister Modi uh and that 68 00:04:27,240 --> 00:04:31,560 Speaker 1: you've reported on his administration since its beginning in fourteen, 69 00:04:32,400 --> 00:04:35,880 Speaker 1: So you know from what you see over there, has 70 00:04:35,880 --> 00:04:40,880 Speaker 1: he failed relative to the expectations that were placed on him. 71 00:04:40,960 --> 00:04:44,320 Speaker 1: What do you think it's been. It's been a mixed 72 00:04:44,360 --> 00:04:47,960 Speaker 1: recordom and it's Bunster Moody has had a few hits 73 00:04:47,960 --> 00:04:51,240 Speaker 1: and some misses. Um. I mean, if you look at 74 00:04:51,279 --> 00:04:54,480 Speaker 1: the global economic map, where else in the world will 75 00:04:54,520 --> 00:04:57,839 Speaker 1: you find economy that's expanding over seven percent and inflation 76 00:04:57,920 --> 00:05:01,880 Speaker 1: that's moderating in a currency it's been largely stable apart 77 00:05:01,920 --> 00:05:05,320 Speaker 1: from India. It's now the fastest growing economy in the world, 78 00:05:05,680 --> 00:05:08,240 Speaker 1: even though relatively it's size and smaller compared to the 79 00:05:08,320 --> 00:05:12,200 Speaker 1: United States or even China. But that's the good part 80 00:05:12,279 --> 00:05:14,480 Speaker 1: now that's not so good. Parts so far has been 81 00:05:14,520 --> 00:05:19,000 Speaker 1: the primister movie has had limited success in scrapping wasteful expenditure, 82 00:05:19,640 --> 00:05:22,320 Speaker 1: something it promised when he got that historic mandate in 83 00:05:22,800 --> 00:05:27,880 Speaker 1: elections in he also promised of um cutting back subsidies. 84 00:05:27,920 --> 00:05:31,040 Speaker 1: These were like the large reforms that were supposed to 85 00:05:31,440 --> 00:05:34,200 Speaker 1: reset the economy and put it on a on a 86 00:05:34,240 --> 00:05:39,960 Speaker 1: faster growth path. He also promised scrapping leaky food distribution system. Now, 87 00:05:40,240 --> 00:05:44,240 Speaker 1: remember all these are very unpopular decisions and traditionally in 88 00:05:44,240 --> 00:05:48,320 Speaker 1: India governments can manage to do these things in their 89 00:05:48,320 --> 00:05:50,919 Speaker 1: first few years in office, and that's what was what 90 00:05:51,120 --> 00:05:54,480 Speaker 1: was expected from Prime Minister Moody because he had won 91 00:05:54,520 --> 00:05:56,960 Speaker 1: the election on the development card. Now a lot of 92 00:05:57,000 --> 00:06:01,080 Speaker 1: it hasn't happened. There's been something incremental step, but it's 93 00:06:01,080 --> 00:06:04,359 Speaker 1: been a very slow movement. There's been There was a 94 00:06:04,360 --> 00:06:08,120 Speaker 1: promise of a manistionwide sales tax that's been stuck in 95 00:06:08,160 --> 00:06:11,000 Speaker 1: Parliament for over your now, so that those are the 96 00:06:11,000 --> 00:06:15,440 Speaker 1: areas where he's underwhelmed. A lot of disruptive steps were expected, 97 00:06:15,600 --> 00:06:18,520 Speaker 1: but what we've been witnessing over the past two years 98 00:06:18,760 --> 00:06:22,000 Speaker 1: is actually incrementally changed. Ernie let's rewind the tape for 99 00:06:22,080 --> 00:06:26,400 Speaker 1: two years. How did expectations get so high? And do 100 00:06:26,520 --> 00:06:29,560 Speaker 1: they matter anyway? Is there a chance that when his 101 00:06:29,800 --> 00:06:32,640 Speaker 1: term ends, people will look back and say some of 102 00:06:32,680 --> 00:06:36,559 Speaker 1: these steps were nothing short of revolutionary. They just took 103 00:06:36,600 --> 00:06:40,400 Speaker 1: a while to happen. And you know, watching the lamb 104 00:06:40,520 --> 00:06:44,880 Speaker 1: sausage being made can be pretty painful, but ultimately it's 105 00:06:44,920 --> 00:06:48,440 Speaker 1: the results you want to taste. And then that's part 106 00:06:48,480 --> 00:06:51,240 Speaker 1: partly to whatever you said. You know, the steps step 107 00:06:51,320 --> 00:06:54,400 Speaker 1: movie has been taking. He's putting a lot of money 108 00:06:54,440 --> 00:06:59,520 Speaker 1: in building a highway network. He's upgrading airports, he's improving ports, 109 00:07:00,040 --> 00:07:04,640 Speaker 1: basically putting a lot of money into infrastructure, creating capacity 110 00:07:05,080 --> 00:07:08,600 Speaker 1: so that that's easier movement of people and goods, which 111 00:07:08,640 --> 00:07:13,240 Speaker 1: is necessity for any modern, fast growing economy. He's also 112 00:07:13,320 --> 00:07:18,280 Speaker 1: galganized bureaucracy, he's empowered state governments, and he's also generated 113 00:07:18,320 --> 00:07:22,960 Speaker 1: a lot of money from telecom auctions and auctioning mining assets. Now, 114 00:07:23,000 --> 00:07:28,560 Speaker 1: these are all steps which don't immediately in results. Um uh, 115 00:07:28,880 --> 00:07:33,160 Speaker 1: you know, the consumer is going through a pain, but 116 00:07:33,440 --> 00:07:36,280 Speaker 1: these are building blocks which will sustain high levels of 117 00:07:36,560 --> 00:07:39,360 Speaker 1: growth in the coming years. So, like I said earlier, 118 00:07:39,400 --> 00:07:43,000 Speaker 1: it's like incremental steps. There's no big bang happening here, 119 00:07:43,440 --> 00:07:47,239 Speaker 1: but maybe um, five to seven years down the line, 120 00:07:47,920 --> 00:07:51,920 Speaker 1: these measures that times to Marie's taking today will lead 121 00:07:51,960 --> 00:07:56,320 Speaker 1: to a sustained high growth. So that's the situation on ground. 122 00:07:57,920 --> 00:08:01,880 Speaker 1: So any houses played out economically, could you give us 123 00:08:01,920 --> 00:08:07,160 Speaker 1: some numbers here? Yeah, So you have about growth which 124 00:08:07,200 --> 00:08:10,480 Speaker 1: is about seven percent. The outlook for the next year 125 00:08:10,560 --> 00:08:13,960 Speaker 1: is also, uh, the growth would be anywhere between seven 126 00:08:13,960 --> 00:08:17,760 Speaker 1: to eight percent. A lot actually depends on, you know, 127 00:08:17,800 --> 00:08:21,760 Speaker 1: the global external environment. So far, even though there's been 128 00:08:21,880 --> 00:08:25,320 Speaker 1: a tremendous stream pain in the global economy, for India, 129 00:08:25,400 --> 00:08:28,440 Speaker 1: it's actually worked to its advantage because India's a big 130 00:08:28,560 --> 00:08:32,280 Speaker 1: energy inporting country and lower oil prices mean that you know, 131 00:08:32,400 --> 00:08:35,199 Speaker 1: you you you spend less on oil and the input 132 00:08:35,240 --> 00:08:38,800 Speaker 1: costs for for the manufacturing sector goes down. So in 133 00:08:38,840 --> 00:08:41,720 Speaker 1: that sense, the growth outlook is quite positive in terms 134 00:08:41,760 --> 00:08:44,960 Speaker 1: of seven percent pluss growth intension has been hovering around 135 00:08:44,960 --> 00:08:49,280 Speaker 1: about five percent going forward. Governor argin Reserve Banks India 136 00:08:49,320 --> 00:08:52,360 Speaker 1: governor Central Bank governor expects that it would be anywhere 137 00:08:52,400 --> 00:08:56,600 Speaker 1: between about five and six percent. That's pretty manageable for 138 00:08:56,600 --> 00:08:59,480 Speaker 1: a developing economy. Like India, which is going pretty fast, 139 00:08:59,760 --> 00:09:03,319 Speaker 1: and and current account deficit. That's another major one for 140 00:09:03,440 --> 00:09:06,560 Speaker 1: India because of the amount of imports that the economy 141 00:09:06,600 --> 00:09:10,120 Speaker 1: takes and that's also been under control. And lastly, government 142 00:09:10,200 --> 00:09:13,400 Speaker 1: spending in terms of fiscal deficit, you know, which which 143 00:09:13,520 --> 00:09:16,320 Speaker 1: decides the ability for the government to borrow and also 144 00:09:16,800 --> 00:09:21,000 Speaker 1: impacts bordering rates for the private sector. The fiscal deficit 145 00:09:21,080 --> 00:09:23,079 Speaker 1: also has been under control and the government has been 146 00:09:23,400 --> 00:09:26,520 Speaker 1: keeping a fairly tight cap on how it spends the money. 147 00:09:26,559 --> 00:09:29,680 Speaker 1: So so far it's been the metrics in terms of 148 00:09:29,679 --> 00:09:34,600 Speaker 1: actual numbers. All the macroeconomics indicators are suggesting that goth 149 00:09:34,600 --> 00:09:37,000 Speaker 1: will be sustain and infliction will be under control. So 150 00:09:37,040 --> 00:09:39,760 Speaker 1: now we're up to speed on the current scene in India. 151 00:09:40,120 --> 00:09:42,520 Speaker 1: We'll come back and talk about what's getting in the 152 00:09:42,559 --> 00:09:47,200 Speaker 1: way of India's continued economic rise, a peaceful one, even 153 00:09:47,400 --> 00:09:50,000 Speaker 1: as one of its neighbors would say, First a word 154 00:09:50,080 --> 00:09:58,600 Speaker 1: from our sponsor, what do traders want to limit risk? 155 00:09:58,720 --> 00:10:01,640 Speaker 1: Access every opportunity and trade on a level playing field. 156 00:10:01,880 --> 00:10:04,480 Speaker 1: Need x binary options let you set your maximum profit 157 00:10:04,520 --> 00:10:07,280 Speaker 1: and loss before the trade, so your risk is always limited. 158 00:10:07,600 --> 00:10:11,080 Speaker 1: Find opportunities in multiple markets, stock indussees commodities for X, 159 00:10:11,120 --> 00:10:14,840 Speaker 1: even economic numbers and Bitcoin, all from one account and platform. 160 00:10:15,400 --> 00:10:18,920 Speaker 1: Nat X is a CSTC regulated exchange with transparency, free 161 00:10:18,920 --> 00:10:23,319 Speaker 1: market data and fairness guaranteed innovations of financial industry needs 162 00:10:23,640 --> 00:10:26,400 Speaker 1: and need X already has. That's why we think binary 163 00:10:26,400 --> 00:10:29,240 Speaker 1: options are the future of trading and it's here now 164 00:10:29,280 --> 00:10:32,440 Speaker 1: at n A d e X, dot com futures options 165 00:10:32,440 --> 00:10:34,640 Speaker 1: and swaps. Trading involves risk and may not be appropriate 166 00:10:34,640 --> 00:10:45,320 Speaker 1: for all investors. The biggest brand created in India, That's 167 00:10:45,360 --> 00:10:48,280 Speaker 1: what Prime Minister Modi has called his campaign to make 168 00:10:48,320 --> 00:10:53,160 Speaker 1: India the next global manufacturing hub. Billboards from Germany to 169 00:10:53,280 --> 00:10:59,240 Speaker 1: California implore make in India, Ernie. How's that campaign going? So, 170 00:10:59,320 --> 00:11:02,520 Speaker 1: simply put, it's a campaign called make in India. Wherein 171 00:11:03,120 --> 00:11:05,680 Speaker 1: what time Mr Movies trying to do is to create 172 00:11:05,720 --> 00:11:10,080 Speaker 1: a robust manufacturing sector so that there are enough jobs 173 00:11:10,160 --> 00:11:13,440 Speaker 1: for the youth. Remember, India has got a huge demographic dividend, 174 00:11:13,760 --> 00:11:16,680 Speaker 1: with nearly half of its population below the age of 175 00:11:16,920 --> 00:11:21,560 Speaker 1: twenty five million workers joining the workforce every month, so 176 00:11:21,880 --> 00:11:25,360 Speaker 1: um attracting factory jobs is key to Prime minister modes 177 00:11:25,600 --> 00:11:29,800 Speaker 1: growth plans. He's pushing to boost the share of manufacturing 178 00:11:30,080 --> 00:11:32,720 Speaker 1: in the economy to a quarter. It's about eighteen percent 179 00:11:32,840 --> 00:11:37,000 Speaker 1: now and he plans to put about hundred million people 180 00:11:37,040 --> 00:11:40,160 Speaker 1: to work in brand new factories by twenty twenty two. 181 00:11:40,480 --> 00:11:44,960 Speaker 1: So he's been going around asking global investors to set 182 00:11:45,040 --> 00:11:51,600 Speaker 1: up factories, especially in focus areas like automobiles, pharmaceuticals, engineering products, 183 00:11:51,679 --> 00:11:55,760 Speaker 1: electronics and defense manufacturing. India is one of the biggest 184 00:11:56,000 --> 00:11:59,880 Speaker 1: importer of defense equipment UM given its issues with the 185 00:12:00,000 --> 00:12:03,720 Speaker 1: ables namely Pakistan in China. So pis movie has been 186 00:12:03,760 --> 00:12:07,120 Speaker 1: trying to boost the manufacturing sector and it's about like 187 00:12:07,600 --> 00:12:10,120 Speaker 1: a quarter of the economy is from manufacturing in twenty 188 00:12:10,200 --> 00:12:13,640 Speaker 1: twenty two and create jobs for a hundred billion people 189 00:12:13,679 --> 00:12:17,000 Speaker 1: by in another seven years. So when I'm wondering what 190 00:12:17,040 --> 00:12:21,280 Speaker 1: did the successes of this campaign and maybe the shortcomings 191 00:12:21,400 --> 00:12:25,840 Speaker 1: of this campaign to say about Prime Minister Moodies India, 192 00:12:27,679 --> 00:12:29,840 Speaker 1: Actually it's a it's a mixed support card. You know, 193 00:12:30,000 --> 00:12:33,800 Speaker 1: it isn't still a very easy place to open an 194 00:12:33,920 --> 00:12:37,839 Speaker 1: enterprise and run a business, but things are improving ever 195 00:12:37,920 --> 00:12:40,920 Speaker 1: since times too more they took part in two thousands fourteen. 196 00:12:40,960 --> 00:12:45,080 Speaker 1: He's made it improve the India's ranking in the World Bank. 197 00:12:45,240 --> 00:12:48,440 Speaker 1: It's jumped for places. In the last report that had 198 00:12:48,480 --> 00:12:51,520 Speaker 1: come out, it's about at higher and third position. That 199 00:12:51,679 --> 00:12:55,600 Speaker 1: isn't very impressive for a country that wants to attract 200 00:12:56,120 --> 00:12:59,640 Speaker 1: a law of investment and to sort of become the 201 00:12:59,640 --> 00:13:02,959 Speaker 1: globe manufacturing hub. But things are improving, it's not happening 202 00:13:03,000 --> 00:13:05,800 Speaker 1: fast enough. The government has a role in in most 203 00:13:05,800 --> 00:13:09,920 Speaker 1: force sets of business. Things do get very bureaucratic, especially 204 00:13:10,000 --> 00:13:12,480 Speaker 1: with business. There's a lot of paperwork to deal with 205 00:13:12,559 --> 00:13:15,760 Speaker 1: while opening up business. But Mr movie has done some 206 00:13:16,440 --> 00:13:19,959 Speaker 1: sort of self certification. You need less of PaperWorks if 207 00:13:19,960 --> 00:13:22,600 Speaker 1: there were five forms needed, so now he's consolidated into 208 00:13:22,960 --> 00:13:27,600 Speaker 1: one form. So he's he's putting the building blocks. Investment 209 00:13:27,640 --> 00:13:31,720 Speaker 1: growth overall remains subdued, but the sentiment in terms of 210 00:13:31,760 --> 00:13:35,400 Speaker 1: India is a difficult place to do business. UM is 211 00:13:35,480 --> 00:13:40,000 Speaker 1: improving in terms um of the fact that foreign direct 212 00:13:40,040 --> 00:13:44,160 Speaker 1: investment has increased about twenty seven percent since May two 213 00:13:44,160 --> 00:13:48,000 Speaker 1: tho forty, even prying Mr Moody came to power and 214 00:13:48,040 --> 00:13:50,520 Speaker 1: all this at a time when global demand was slowing. 215 00:13:50,640 --> 00:13:54,360 Speaker 1: So things are improving. People are getting attracted, but he 216 00:13:54,400 --> 00:13:57,280 Speaker 1: needs to possibly step on the gas in terms of 217 00:13:57,559 --> 00:13:59,839 Speaker 1: make it an easier place to do business and any 218 00:14:00,040 --> 00:14:03,040 Speaker 1: what are some of the institutional factors, some of the 219 00:14:03,120 --> 00:14:08,640 Speaker 1: demographic factors that a single person in the term of 220 00:14:08,679 --> 00:14:11,680 Speaker 1: a single government, let alone the halfway point in the 221 00:14:11,760 --> 00:14:17,320 Speaker 1: first term, that anyone would struggle to address. Strength of unions, 222 00:14:17,360 --> 00:14:22,040 Speaker 1: this robust sense of ownership that state governments have over 223 00:14:22,080 --> 00:14:25,960 Speaker 1: their own affairs. Talk a little about that. Like you 224 00:14:26,040 --> 00:14:28,360 Speaker 1: said in your opening remarks, you know, it is a 225 00:14:28,400 --> 00:14:32,160 Speaker 1: difficult place to government. It's a noisy democracy, and it's 226 00:14:32,200 --> 00:14:35,000 Speaker 1: got a federal structure, and it's got a state structure 227 00:14:35,520 --> 00:14:37,800 Speaker 1: that a lot of things that are an exclusive domain 228 00:14:38,200 --> 00:14:41,760 Speaker 1: of the state governments where where you know, the federal 229 00:14:41,760 --> 00:14:44,680 Speaker 1: government doesn't have much of a role. For example, you know, 230 00:14:44,720 --> 00:14:46,960 Speaker 1: I sort of foreign investor. You come here and you 231 00:14:47,040 --> 00:14:48,840 Speaker 1: say that you want to set up this billion dollars 232 00:14:49,040 --> 00:14:52,840 Speaker 1: cup plant. Now planets to movie can direct you to 233 00:14:53,400 --> 00:14:56,440 Speaker 1: a set of states where which you would be interested, 234 00:14:56,520 --> 00:15:00,360 Speaker 1: or you can or the foreign investor can decide. But 235 00:15:00,480 --> 00:15:05,440 Speaker 1: beyond that, getting you know, what's the connection, getting land, 236 00:15:06,160 --> 00:15:11,280 Speaker 1: getting all other clearances, the investor has to go through 237 00:15:11,320 --> 00:15:14,480 Speaker 1: the state government. Now it depends on how open is 238 00:15:14,520 --> 00:15:17,800 Speaker 1: that state government in terms of accepting some of the demands. 239 00:15:17,800 --> 00:15:19,680 Speaker 1: So that's where the problem is. You know, Prime Minister 240 00:15:19,760 --> 00:15:23,680 Speaker 1: Movie can be pretty open to business, can you know, 241 00:15:23,840 --> 00:15:28,120 Speaker 1: welcome global investors. But beyond point, it is in the 242 00:15:28,280 --> 00:15:31,000 Speaker 1: domain of the state government to make it an easier 243 00:15:31,000 --> 00:15:33,640 Speaker 1: place to do business for the sort of global investor. 244 00:15:33,800 --> 00:15:37,920 Speaker 1: So ultimately the car maker has to rely on compassionate 245 00:15:37,960 --> 00:15:41,480 Speaker 1: state government to help sort out things. Primes to Movie 246 00:15:41,520 --> 00:15:44,400 Speaker 1: can intervene. But unlike while he was the Chief minister 247 00:15:44,480 --> 00:15:46,880 Speaker 1: in Gujab, where things were much more in his control, 248 00:15:47,280 --> 00:15:50,240 Speaker 1: as a prime minister, there are certain handicaps that he 249 00:15:50,320 --> 00:15:53,600 Speaker 1: has to deal with. But having said that, things are 250 00:15:53,680 --> 00:15:56,800 Speaker 1: improving because you know, states are now competing for investments. 251 00:15:57,120 --> 00:16:00,640 Speaker 1: Prime Minister a Movie is a shiny example of being 252 00:16:00,680 --> 00:16:04,200 Speaker 1: a successful chief minister who's made a career at the 253 00:16:04,280 --> 00:16:07,560 Speaker 1: national level because he could exhibit that you know, growth 254 00:16:07,640 --> 00:16:11,479 Speaker 1: leads to growth necessarily is not doesn't make you unpopular. 255 00:16:12,040 --> 00:16:14,640 Speaker 1: If you give growth to people, if they have higher 256 00:16:14,680 --> 00:16:18,160 Speaker 1: disposable income, there's a greater chance of them voting your 257 00:16:18,240 --> 00:16:21,800 Speaker 1: back in power. So the days of handouts and subsidies 258 00:16:21,800 --> 00:16:25,400 Speaker 1: are over. Various chief ministers realizing that if you government 259 00:16:25,440 --> 00:16:28,400 Speaker 1: of state well if you attracked for investors, people are 260 00:16:28,480 --> 00:16:31,480 Speaker 1: bound to vote you back. They're not no longer looking 261 00:16:31,560 --> 00:16:34,120 Speaker 1: for handouts, looking for a better life for their children, 262 00:16:34,720 --> 00:16:38,680 Speaker 1: higher disposable income. So and I guess this brings us 263 00:16:38,720 --> 00:16:41,880 Speaker 1: to the budget, which I heard is presented next week. 264 00:16:42,360 --> 00:16:44,720 Speaker 1: When Dan originally told me that he wanted to talk 265 00:16:44,760 --> 00:16:49,000 Speaker 1: about India's budget, I groaned a little bit, you know, 266 00:16:49,040 --> 00:16:52,240 Speaker 1: because the budget it sounds like such a pedestrian thing. 267 00:16:52,320 --> 00:16:54,280 Speaker 1: But tell us how big of a deal is a 268 00:16:54,440 --> 00:16:57,280 Speaker 1: budget in India and why is it's such a big 269 00:16:57,280 --> 00:17:00,400 Speaker 1: deal unlike other countries. You know, the did is a 270 00:17:00,400 --> 00:17:05,240 Speaker 1: flagship event in India's economic policy making calendar. It is 271 00:17:05,280 --> 00:17:07,480 Speaker 1: not just an account statement where the government comes and 272 00:17:07,520 --> 00:17:10,159 Speaker 1: says that this is how much they earned last year 273 00:17:10,160 --> 00:17:12,959 Speaker 1: and the samad spent here. It's more, you know, a 274 00:17:13,040 --> 00:17:16,320 Speaker 1: chance for the government to present its economic vision for 275 00:17:16,400 --> 00:17:18,520 Speaker 1: the for the coming year. It's also used as a 276 00:17:18,560 --> 00:17:23,080 Speaker 1: launch pad for government programs, sometimes to initiate structural reforms 277 00:17:23,160 --> 00:17:27,120 Speaker 1: and in some cases announced populous measure especially ahead of elections. 278 00:17:27,359 --> 00:17:32,680 Speaker 1: Remember in when you when India embraced free market reforms, 279 00:17:32,760 --> 00:17:38,320 Speaker 1: it started with the budget announcement. So historically, the budget 280 00:17:38,359 --> 00:17:44,720 Speaker 1: has been used by prime ministers slash political parties slash 281 00:17:45,200 --> 00:17:49,399 Speaker 1: leaders to showcase their best programs. So in that sense, 282 00:17:49,440 --> 00:17:51,720 Speaker 1: that's the reason why it's sort of a big deal 283 00:17:52,040 --> 00:17:55,320 Speaker 1: in India. There's a lot of pomp and ceremony surrounding 284 00:17:55,359 --> 00:17:57,880 Speaker 1: the budget in Australia as well. I guess this must 285 00:17:57,960 --> 00:18:02,160 Speaker 1: be a British legacy for both countries. Yeah, exactly. And 286 00:18:02,240 --> 00:18:05,360 Speaker 1: does the Finance Minister come out of the Treasury building 287 00:18:05,480 --> 00:18:07,960 Speaker 1: with a red suitcase and get into the car and 288 00:18:08,080 --> 00:18:11,800 Speaker 1: drive to Parliament amidst the flashing of cameras. Yeah, the 289 00:18:11,840 --> 00:18:14,959 Speaker 1: same thing happens here as well. Then, for all this 290 00:18:15,640 --> 00:18:18,720 Speaker 1: and for all the issues that we've raised in this podcast, 291 00:18:19,280 --> 00:18:22,600 Speaker 1: the country must be doing something right. After all, growth 292 00:18:22,680 --> 00:18:25,840 Speaker 1: was the highest in the G twenty last year. Of course. 293 00:18:25,880 --> 00:18:27,680 Speaker 1: I mean there are a lot of things that the 294 00:18:27,720 --> 00:18:30,320 Speaker 1: government has done and there are three parts to this, 295 00:18:30,440 --> 00:18:33,880 Speaker 1: you know. The first one has been the dogged approach 296 00:18:33,920 --> 00:18:38,000 Speaker 1: of both the government and the Central Bank to curb 297 00:18:38,080 --> 00:18:43,800 Speaker 1: inflation and resist the temptation of opening po strings and spending. 298 00:18:43,800 --> 00:18:47,080 Speaker 1: You know, there's this steered clear of any kind of 299 00:18:47,320 --> 00:18:52,560 Speaker 1: fiscal stimulus, even though growth was recovering. The single focus 300 00:18:52,640 --> 00:18:58,119 Speaker 1: was essentially controlled inflation and fiscal deficit. Inflation has been 301 00:18:58,160 --> 00:19:00,680 Speaker 1: brought to about five percent from world close to double 302 00:19:00,720 --> 00:19:03,760 Speaker 1: digits two years back. The other thing, the second part 303 00:19:03,800 --> 00:19:07,680 Speaker 1: of this entire development is that time Mr Moody has 304 00:19:07,880 --> 00:19:11,760 Speaker 1: opened bank accounts to the poor. Um. I remember a 305 00:19:11,920 --> 00:19:15,480 Speaker 1: lot of people India are living in the villages there, 306 00:19:15,520 --> 00:19:19,160 Speaker 1: you know, outside the formal banking system. So he's brought 307 00:19:19,160 --> 00:19:22,720 Speaker 1: them in one, he's brought them in two um to 308 00:19:22,760 --> 00:19:25,800 Speaker 1: give them better access to financial products. And also it 309 00:19:25,920 --> 00:19:30,280 Speaker 1: helps him transfer subsidy payments directly into their bank accounts, 310 00:19:30,320 --> 00:19:36,040 Speaker 1: thereby plugging leakages, cutting out middle men, bringing down corruption. 311 00:19:36,359 --> 00:19:39,480 Speaker 1: So that's been that's been the second big area where 312 00:19:40,080 --> 00:19:43,720 Speaker 1: things have been done and things have gone right for 313 00:19:44,080 --> 00:19:47,320 Speaker 1: Prime Mr Moody. The third is he's taken steps to 314 00:19:47,520 --> 00:19:52,680 Speaker 1: attract foreign investment. He's capitalized on the positive sentiment ever 315 00:19:52,760 --> 00:19:55,840 Speaker 1: since he took office after that when the global financial 316 00:19:55,840 --> 00:19:59,960 Speaker 1: investors were really looking forward to parme mister Moody getting power, 317 00:20:00,320 --> 00:20:03,000 Speaker 1: and he's capitalized on it. He's open certain sectors. He's 318 00:20:03,000 --> 00:20:08,159 Speaker 1: opened foreign direct investment for defense manufacturing. He's increased the 319 00:20:08,240 --> 00:20:11,639 Speaker 1: limit or raised the gap on foreign investment in insurance 320 00:20:12,119 --> 00:20:14,760 Speaker 1: sofa on the financial sector side. Also, he's taken a 321 00:20:14,800 --> 00:20:18,359 Speaker 1: couple of measures. So that's the reason why all of 322 00:20:18,400 --> 00:20:21,040 Speaker 1: this has come together and you live the kind of 323 00:20:21,040 --> 00:20:25,480 Speaker 1: results at a time when most of India's appears in 324 00:20:25,520 --> 00:20:28,240 Speaker 1: the emerging economies backet have actually fallen off the radar. 325 00:20:28,920 --> 00:20:32,040 Speaker 1: You know, Aki Tori isn't here today, but she would 326 00:20:32,080 --> 00:20:35,679 Speaker 1: have loved this conversation. Heck, she may even end up 327 00:20:35,720 --> 00:20:39,720 Speaker 1: working in India. Well, I think she'd like it a 328 00:20:39,720 --> 00:20:43,320 Speaker 1: lot um. As our listeners know, I'm doing a three 329 00:20:43,320 --> 00:20:46,440 Speaker 1: month temporary transfer to Tokyo right now and I'm really 330 00:20:47,000 --> 00:20:49,400 Speaker 1: loving every single minute of it, So I bet she'd 331 00:20:49,440 --> 00:20:53,479 Speaker 1: love India too. Ernie, we can't thank you enough your insight. 332 00:20:53,640 --> 00:20:56,960 Speaker 1: It's great to get the flavor on the ground. Thanks 333 00:20:57,240 --> 00:21:00,320 Speaker 1: thanks Jackie, and thanks to all of you for sending 334 00:21:00,359 --> 00:21:03,280 Speaker 1: to Bloomberg Benchmark. We're going to be back again next week. 335 00:21:03,760 --> 00:21:06,159 Speaker 1: Until then, you can find us on the Bloomberg terminal 336 00:21:06,240 --> 00:21:09,160 Speaker 1: and on Bloomberg dot com, as well as on iTunes, 337 00:21:09,280 --> 00:21:12,760 Speaker 1: pocket Cast, Stitcher, and Google Play. And while you're there, 338 00:21:12,840 --> 00:21:15,200 Speaker 1: please take a minute to rate and review the show. 339 00:21:15,280 --> 00:21:17,880 Speaker 1: Some more people can find us and let us know 340 00:21:17,920 --> 00:21:20,840 Speaker 1: what you thought of the show. Ernie, our colleague in 341 00:21:20,840 --> 00:21:25,240 Speaker 1: India has a Twitter handle at unique. That's pretty unique. 342 00:21:25,640 --> 00:21:30,280 Speaker 1: I'm at Daniel Moss d c Aki is Akio seven 343 00:21:30,520 --> 00:21:34,200 Speaker 1: and let's not forget bound for India soon at Tory stillwell, 344 00:21:34,320 --> 00:21:42,040 Speaker 1: see you next week. This episode was brought to you 345 00:21:42,080 --> 00:21:44,680 Speaker 1: by nate X. You know, any long term investment is 346 00:21:44,720 --> 00:21:47,440 Speaker 1: going to go through short term dips and price fluctuations 347 00:21:47,640 --> 00:21:49,920 Speaker 1: nat X binary options that you turn those short term 348 00:21:49,920 --> 00:21:53,879 Speaker 1: movements into trading opportunities. You decide your maximum profit and 349 00:21:53,920 --> 00:21:57,240 Speaker 1: loss before each trade, so your risk is always limited. 350 00:21:57,320 --> 00:22:00,119 Speaker 1: Trade stock in dissees, commodities for X, even bitcoin going 351 00:22:00,200 --> 00:22:03,760 Speaker 1: in economic numbers, all from one account on a CFTC 352 00:22:03,920 --> 00:22:07,400 Speaker 1: regulated US exchange. Instead of just watching the markets ups 353 00:22:07,400 --> 00:22:10,439 Speaker 1: and downs, turn them into trading opportunities. At nate x 354 00:22:10,600 --> 00:22:13,800 Speaker 1: dot com it's the future of trading and a d 355 00:22:13,920 --> 00:22:18,360 Speaker 1: e X dot com futures options and swaps. Trading involves 356 00:22:18,480 --> 00:22:21,480 Speaker 1: risk and may not be appropriate for all investors. We 357 00:22:21,640 --> 00:22:23,840 Speaker 1: at Bloomberg are proud of our new and growing slate 358 00:22:23,880 --> 00:22:27,680 Speaker 1: of original content podcasts. They include Benchmark, a jargon free 359 00:22:27,680 --> 00:22:30,360 Speaker 1: dive into the stories that drive the global economy, It's 360 00:22:30,359 --> 00:22:34,320 Speaker 1: hosted by Tory Stillwell, Ako and Dan Moss. Odd Lots, 361 00:22:34,320 --> 00:22:37,320 Speaker 1: hosted by Joe Wisenhal and Tracy Alloway, takes you on 362 00:22:37,359 --> 00:22:39,960 Speaker 1: a not so random walk through hot topics and markets, 363 00:22:40,200 --> 00:22:43,800 Speaker 1: finance and economics. And each week Bloomberg m and a 364 00:22:43,880 --> 00:22:47,520 Speaker 1: reporter Alex Sherman discusses market moving news about mergers in 365 00:22:47,800 --> 00:22:51,320 Speaker 1: Deal of the Week from Washington and Points in Between. Meantime, 366 00:22:51,640 --> 00:22:55,080 Speaker 1: we showcase the intersection of politics and pop culture with 367 00:22:55,160 --> 00:22:58,240 Speaker 1: Culture Caucus hosted by John Hilman, and we'll Leach from 368 00:22:58,240 --> 00:23:02,159 Speaker 1: Bloomberg Politics. And then there's Masters in Politics hosted by 369 00:23:02,240 --> 00:23:05,320 Speaker 1: veteran TV producers Tammy Haddad and Betsy Fisher Martin. This 370 00:23:05,440 --> 00:23:09,960 Speaker 1: bi weekly podcast features extended conversations with candidates, campaign strategists, 371 00:23:10,000 --> 00:23:12,560 Speaker 1: and journalists. You can find all these podcasts on the 372 00:23:12,560 --> 00:23:17,280 Speaker 1: Bloomber terminal, bloomer dot com, iTunes, SoundCloud, and any one 373 00:23:17,359 --> 00:23:19,600 Speaker 1: of your very favorite podcast platforms.