Indian economy could grow at 8% in 2009-10

Reserve Bank of India expects the Indian economy to grow @ 6% in the financial year 2009-10. The Finance Minister, Pranab Mukherjee on the other hand is much more optimistic and pegs the rate of growth at 7%. The Planning Commission of India said that a 7.4 % growth rate is possible for the current financial year. My personal opinion is that we could land up with a strong growth of even 8% in fiscal year ending March 31, 2010. The reasons for that are multiple. The first indication came with the return of the UPA government at the center earlier this year in the Lok Sabha elections. This was an excellent indicator of the consumer confidence in their government. The second signal came with the appointment of an excellent union cabinet in terms of experience and competence. These two put together signaled the optimism of the country. The union budget followed and fair-minded people agreed with the Minister of Finance in keeping the wild expectations of ‘Corporate India’ in check. The ‘Central Government’ has announced a robust agenda for the next five years and has allocated resources for the same. These are the fundamentals of good governance and that breeds investor confidence. Just THINK about these fundamentals!

The evolution of India’s foreign policy – Part VII

The assassination of Rajiv Gandhi in the evening of the first day of balloting on May21, 1991, stunned the nation and the world. We were in Syracuse, New York at that time, everyone looked shocked and apprehensive. I was not all that shocked because Indira Gandhi and her son Rajiv Gandhi were busy playing with fire since 1979 when they brought down successive governments just to return back to power. Both were playing dangerous games with Punjab, Kashmir and Sri Lanka. My reaction to the gruesome murder was that anyone of the above groups could have done that. But that was not my main concern, I prayed for my country and its stability. The voters of India moved towards Congress Party in sympathy and gave them 215 seats to form a coalition government at the center. Mercifully, better sense prevailed in Congress Party and a soft spoken, mild and seventy year old P V Narasimha Rao, a former foreign minister, was sworn in as the new Prime Minister of India on June 21, 1991.

Prime Minister Narasimha Rao was considered a push-over and a weak leader. He faced enormous problems internally as well as internationally. India faced serious challenges from the self-proclaimed Khalistanis of Punjab, the secessionists from Kashmir and the insurgents in Assam. Rao had to face a humiliating balance of payments situation overseas and a bankrupt country, thanks to a personal feud between V P Singh and Rajiv Gandhi. Neither cared about their country enough to put its priorities first! Narasimha Rao brought Dr Manmohan Singh, an economist and a former governor of the Reserve Bank of India as the new Finance Minister of India. Together these two matured and patriotic Indians gave birth to a new country. Rao was called the “Chanakya” of the new India and Manmohan Singh the savior. Neither could have done without the other. This was the new dawn for a modern India!

India was free again, free of Nehrus, free of Gandhis, free of ideologies and free of stupid socialism. I said “Let freedom ring!” no more license-permit raj, no more babus, no more bribes, only the communists remained as traitors. Dr Manmohan Singh with the political support of cunning Narasimha Rao began the process of dismantling the command and control economy of India. While Indians took a sigh of relief, the world watched an emerging India. The duo (Rao & Singh) transformed a shackled country into an economic dynamo. How many Indians realize the curse of Nehru-Gandhi cabal? Hundreds of millions in India waited for decades for this dynasty to move over and let them also breath for a change. This family beggared 99 crore Indians for 1 crore chamchas. This family destroyed our relations with America and the west because of their Fabian ideologies. India, fundamentally a capitalist society, suffered pseudo socialism for 45 years. Who actually gained anything? The ‘Left Front’ will keep reminding us about the horrors of Nehru-Gandhi era!

The United States of America called on countries like India to open their economies for 50 years after the Second World War. Now that the whole world has heard their call, America is getting ready to shut its doors on trade and commerce. Indo-US relations should have taken off after 1991 but remain mired in American love-affair with Pakistan. George Bush senior and his secretary of state James Baker were keen to improve the relationship with India but the Pakistan lobby in the ‘State’ and ‘Defense’ departments fought hard and maintained the status quo. In any case the Bush administration was on its way out when real reforms hit India. Bill Clinton was coming in with all the baggage from Harry Truman to Jimmy Carter. Exciting things were happening in India and elsewhere but the “bubba” was more interested in other things! Clinton wasted more than 5 years before India blasted its way to the international stage. Prime Minister Narasimha Rao danced in front of President Clinton but the man from Hope, Arkansas was busy being a white man and his transatlantic relationships. He ignored Asia and India till May 1998 explosions!

DLF must diversify into defense…

DLF Ltd, formerly DLF Universal Limited, is India’s largest real estate developer based in New Delhi, India. It rode the wave of India’s unprecedented economic growth. Property developers were among the biggest winners in the country’s economic boom. DLF’s $2 billion IPO (Initial Public Offering) in July 2007 created history being the biggest IPO in India. The company was confined to Delhi and Gurgaon (Haryana) for most of it’s existence. However, with the acquisition of NTC (National Textile Mills) land in Mumbai, DLF has decided to go national. It has made multi-billion dollar investments in Bangalore, Madhya Pradesh and Tamil Nadu. The company intends to develop properties in 60 major cities in India.

In it’s August 23, 2008 issue, The Economist cautions, “The swagger comes out of India’s property market”. Ironically, they are partially right. With double-digit inflation, Reserve Bank of India is constantly hiking up the lending rates. This has taken out the steam from the smouldering housing market. HSBC (Hongkong & Shanghai Banking Corporation) predicts that house prices across most Indian cities could fall by 25-30%. These conditions might linger for a year or more. In the meantime, the defense infrastructure remains much behind schedule. DLF has the financial muscle and the technology to diversify into building India’s defense installations like air-strips, factories, bridges and power plants. DLF is too big to sit on the sidelines.

Chaudhary Raghvendra Singh of Punjab Provincial Civil Services, came from a landed agricultural family. He had the foresight to anticipate how Delhi’s real-estate market would boom when the Partition took place. Singh approached the farmers owning agricultural land in Delhi and persuaded them to part with their property without paying a single penny! His mantra – `payable when able’ – meant he took land on credit from the farmers, making them partners in business. Instead of appropriating all the profits, he shared them with the farmer who had sold the land to him on credit. As people started to trust, they began to invest more money with him as deposits. Which explains the original name, Delhi Land and Financing Company or DLF, that he launched in 1946. This formula worked so well that he eventually developed 21 residential and commercial “colonies” all over Delhi, including South Extension, Hauz Khas and Greater Kailash, which today are prized properties. The good times ended in 1957, when land development in Delhi was nationalized.

Pandit Jawaharlal Nehru, the first Prime Minister of India, became a committed socialist by 1957. He spent less time governing the country and more time getting his government into doing business. He and his minions created Delhi Development Authority and the real estate developers in Delhi nearly went out of business. DLF was no exception. Chaudhary Raghvendra Singh was also looking to diversify.