India looking good...

Destination India...
India is a growth story that looks good if not as yet great.

Investment has to come: 

Infrastructure needs are massive. Only 20 percent of the national highway network is four-lane.

India's ports and airports need substantial improvement and thus investment. So multiplier will be high.

Trains are rather of another era. It would need rapid modernization. Investment here is vital. 

Rural roads need improvement.  It would have multiplier effects.

An estimated 300 million people are not connected to the national electrical grid. Infrastructure investment need is thus substantial. 

The number of urban centers has grown from about 5,000 in 2001 to 8,000 in 2011, and 53 cities already have a population in excess of one million.

There is a need to accommodate an additional 10 million urban dwellers every year and to provide them with adequate basic services.  This needs quite a strong of investment.

The ambitious Government programme for financial inclusion will mop up liquidity and also enhance credit deployment levels. It also touches on insurance comfort zone. This will promote human development and strengthen social fabric.

  

 India has been free of polio for nearly three years now. Life expectancy has more than doubled from 31 years in 1947 to 65 years in 2012. Adult literacy more than quadrupled from 18 percent in 1951

to 74 percent in 2011.  

In the last decade, India grew faster than 92 percent of the world’s nations. Real GDP expanded at an average annual rate of 7.3 percent between FY2003 and FY2012. 

India is an important player in the global information-technology revolution,

At market exchange rates, its share of world GDP has increased by 50 percent in  30 years from 1.8 to 2.7 percent;  is expected to reach 11 percent by 2050.

( Data from a World Bank on line Publication) 

Mumbai tracks Asian sentiment...

Indian Rupee strengthened even as Mumbai stocks edged up seeking to touch 26950 levels. Optimism holds the ground still. With Asian moves on the back of USA data and the market ignoring Europe, and with crude prices benign to India, stock markets seem set to touch 27000 levels soon though there could be resistance there. 

Asia factors in Europe

Asia took Europe in its stride. Europe's woes no more make news. They absorbed the news of stress tests quite well; and the Asian markets rose and that seemed largely driven by sentiments on USA the world's largest economy doing well. Thus the Euro was left not to weaken as markets whispered that European banks may have only a few billion dollars needed to recapitalize for loss categories in non performing assets.

While it looks like Europe is discounted for, one has to wait to receive further positive news. Market may have  already factored in a lower business sentiment in Germany. However, this strengthening of euro seems to affect European competitiveness rather adversely. So European companies would be under pressure. High end companies like BMW and Benz may not be affected as their buyers are rather price inelastic (as they are luxury - 'to be seen to possess categories') . But the Medium enterprises would be under pressure as the euro  appreciates.  This sector normally is a job multiplier one as high end companies are very technology driven. Joblessness in Europe is quite high and there are no immediate prospects of revival there.
Buoyed on the back of Europe and US data, Mumbai might rise in the morning trades but by afternoon, the in and out trader would have booked his gains and exited . Until the RBI responds to the FM's call for an interest rate cut (the intransigence of the Central bank!!!) there is nothing much for corporate sector to hope for.

jaynayar@gmail.com