Ive been interviewing applicants for the coming batch at ISB for the last couple of days. Its exciting to see the enthusiasm and risk taking abilities of the kids. So many more guys starting out in entrepreneurial ventures than 10 years ago and it keeps going up every year I interview. Theyre all completely gung ho about Modi and the changes they feel hes going to bring to the table. Its like close to 100% support for him in the b-schools and corporate clients I work with. The middle class is in love. But my sense is that its not unconditional timeless love. Its unconditional love only for the moment. They feel he needs time. Theyll forgive him every scam and lie and riot for the next 2-3 years at least. None of the liberal carping will have the slightest dent till then but theyll get tired of defending Modi unless he starts delivering by then. My gut tells Indias GDP growth needs to increase by at the very least 0.5% every year to stave off the grumbles of the middle class. NDAs last term delivered average growth of 5.9%, and UPAs growth over two terms was 7.7%, but only 7.1% over the last five years and so I think the public will put up with a minimum average growth rate of 7.2% with a stable year on year increase. Current expectations are of course higher but I think rational folks (whatever that means nowadays) will temper them downwards. 2014: 5.7% 2015: 6.2% 2016: 6.7% 2017: 7.2% 2018: 7.7% 2019: 8.2% If these are the sort of numbers that the NDA produces, then the Congress will say that they delivered higher during their two terms and the BJP will say its higher than what the Congress produced in the last stint and they had to turn things around. If they can show a rising growth trend in the last few years, theyll be given another mandate and I think theyll deserve it from a purely economic point of view (I myself could only vote for them if they cut out the love jihad sort of crap theyre always engaging in - I cant handle racism) The further below 7.1% average they go the less tenable their position will be. The further above 7.2% they reach the more headroom theyll create. I guess the other question I have is what the reaction will be of the bhakts who are assuming 10-15% growth, if actual growth is half that. Will they update their mental models or will they turn?
Posted on: Sun, 19 Oct 2014 16:05:18 +0000
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