February, 2023 (updated May, 2023)
This is a good lens to look at India's economic life cycle with. The economy is in its phase of "focussed growth" where gov't actions will make or break the economy and players in it. Second, the country narrative is important. We're seeing this with "India's economic decade".
Aswath Damodaran on Twitter
Economies/countries move through a life cycle that does not operate in chronological time but is measured by growth rates and the diversity of its economy, with the influence of government greatest at the earlier stages. https://t.co/ruPLdgoF5l pic.twitter.com/LrolrhZLrD— Aswath Damodaran (@AswathDamodaran) February 12, 2023
twitter.com
As I’ve said before, the credit cycle that’s going to fuel growth was always going to have to be initiated by the government directly because of this exact phenomenon. India’s equity risk premium needs to be attractive enough before private and foreign capital starts flowing in.
Aswath Damodaran on Twitter
The country ERPs that emerge from this approach have their weaknesses (an over-dependence on ratings & default spreads), but notwithstanding those flaws, you can see that the price of taking on risk varies widely across the globe. https://t.co/DKVOT2rg4z pic.twitter.com/6WDSCua0Mp— Aswath Damodaran (@AswathDamodaran) February 12, 2023
twitter.com
What’s a better example of “country narrative” than this, where the world’s most prominent leaders are announcing transactions between private corporations. Have Biden and Macron ever announced orders for Boeing and Airbus before this?
Another very factual take on how India’s moment at the world stage has arrived (this time for real). A strong foreign policy like this is part of the “country narrative” that leads to private foreign investment (business leaders take comfort in this), ultimately accelerating economic growth. Our next target - pushing for a permanent UNSC seat.
Modi's Multipolar Moment Has Arrived
Russia's war in Ukraine has benefited India as great powers are competing more vigorously for New Delhi's affection, particularly the United States and China. India has also prevented its Russia policy from spoiling partnerships with key European and Indo-Pacific partners. These trends, if sustained, will contribute to India's rise to great-power status and in turn, shift the global system toward even greater multipolarity.
www.rand.org
