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The Leader and the Sign of the Times

Reforms and Accelerating Growth are the Key to Political Power in India

Reforms and Accelerating Growth are the Key to Political Power in India

The Indian general elections – the “world’s largest exercise in democracy” – will take place in a little less than a year from today with an electorate larger than that of all 34 OECD countries combined electing their parliamentary representatives. In the previous 2014 election, the BJP's coalition, led by Prime Minister Narendra Modi, secured a large parliamentary majority on the back of significant voter disillusionment with the previous Congress-led coalition government which was plagued by several high-profile corruption scandals, which resulted in a sharp slowdown in both reforms and growth. Against this backdrop, voters backed Mr. Modi’s promises of reform and his track record of delivering rapid growth in his home state. Mr. Modi’s government inherited an economy which had slowed to c.6% and was out of favour with international investors and leveraged his party’s parliamentary strength to implement a series of reforms which helped revive growth to c.8%. However, two major back-to-back reforms – demonetisation and the implementation of a national goods and services tax – adversely impacted growth from late-2016 until mid-2017 and have contributed to anti-incumbency against the BJP which has suffered setbacks in some recent regional elections, in spite of growth recovering back to 7-8% levels over the last year. A previously fractured opposition of a weakened Congress and several regional parties has united (at least temporarily) to take on the BJP and appears to be gaining in recent opinion polls for upcoming state elections and hoping to post a credible challenge to the BJP’s majority in the general election next year. Economic growth and reforms again promise to be the key issues of the upcoming election, and the assessment of Mr. Modi’s economic performance is at the epi-centre of the narrative for both the BJP and the opposition

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India’s Transformation Through to 2040, Overview of the Metrics of Industrial India vs. Information Age India July 2018

In 1991, India opened its economy to the rest of the world and reversed decades of slow and insular growth implementing a series of far-ranging reforms. There have been ups and downs in the years since; today however, a little over 25 years later, the effects of this liberalisation are clearly visible with India enjoying an increasingly vibrant domestic economy, a large and rapidly growing middle class, significant foreign investment inflows, and a high degree of political stability. Following one of the down swings, recent changes by the current administration have recovered some of the economic losses of the previous one and placed the India story back on the agenda of international investors. As the fastest growing and currently sixth largest economy in the world, India appears set to become a top three global economy and a middle-income country over the next c.25 years. This economic growth is set to transform the country, its society and its place in the world, creating a prosperous democracy of 1.4bn with a diversified and globalised economy. This month’s Sign of the Times plots India’s projected journey through to 2040 across five key economic and social metrics, benchmarking the country’s transformation to a series of global comparisons.

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Indian ‘Certainties’ Revisited – and the Changes They Will Drive June 2018

One year ago, the Sign of the Times laid out what we believed were 12 ‘certainties’ that had the potential to transform India by 2025, based on a number of broader demographic, social, economic, and political macro-themes. These ‘certainties’ of India have the potential to create the next big global player in economics and politics. A closer look at the ‘certainties’ however reveals that while some of them were indeed certain, particularly those related to demographics, others among the 12, such as the economic predictions, were directionally correct but more dependent on India getting key policy actions right along the way, as was highlighted in the Sign at the time. Next month’s Sign of the Times provides the key economic metrics and their impact beyond 2025, up through the point when India can be expected to emerge as a middle-income country around 2040. In addition to benchmarking the rate and scale of change to other middle income and developed countries, next month’s Leader will examine where the country is headed, both in terms of what India will look like and what its likely impact on the world might be. As a prelude to this analysis this month’s Sign of the Times revisits the original certainties and the policy priorities that will enable India’s trajectory and the transformation it will drive.

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The Commonwealth 2.0: An Opportunity for India to Lead May 2018

For almost 70 years the Commonwealth of Nations, formerly the British Commonwealth, has linked together one third of humanity in a loose confederation of states based on shared history and shared values. However, the Commonwealth project for decades has fallen short of its potential, due to both a lack of leadership and to the nature of the institution itself, being a free association of equal members with no permanent governance organs. Nevertheless, the economic, political and security potential of the Commonwealth remains considerable at a time when existing geopolitical alliances and institutions generally are in flux with a vacillating America and an increasingly assertive China. India, the Commonwealth’s largest and arguably most dynamic member, has seen its prospects and standing revitalised under the current government and therefore has an opportunity to step up and be one of the leaders in the transformation of the bloc into a positive force for development, security and prosperity in the world.

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Good News

Good News

A quick preview of the good news

Addressing India’s Literacy Challenge

The Frontline

Addressing India’s Literacy Challenge
A brief discussion with Sourav Banerjee, India Country Director for Room to Read, a global non-profit organisation whose mission is to tackle the problem of childhood literacy across the developing world

Investing in the New India Story

The Investor

Investing in the “New India Story” – our detailed thoughts on the opportunity and challenges of investing in India

The Big Picture TEST, Metrics

The Big Picture TEST, Metrics

Continuing trade and manufacture growth in India as RBI hikes repo rate an additional 25bp. PMI continues to remain above 50, with import growth continuing to significantly outstrip exports

This Month Through China’s Eyes

This Month Through China’s Eyes

Chinese views on the evolving Sino-US trade war, the economic crisis in Turkey and the recently approved US military budget increase

Last Month Through India’s Eyes

Last Month Through India’s Eyes

Results of the no-confidence motion against the government and depreciation in the value of the Rupee

Pointing to the Future

Pointing to the Future

US-China power competition, China’s Belt and Road Initiatives, India’s weakening Rupee, India’s potential partnership with the EU, and the growth potential of India’s states

Big News

Big News

India Clamps Down on Migration, India Restricts Offshore Trading of Derivatives, Floods in South India, New US Tariffs on China Despite Talks, China Appoints New Propaganda Head, Growing US Support for Taiwan

About Greater Pacific

Greater Pacific Capital is an investing institution designed to identify and develop investing opportunities based on the use of distinctive global macro thematic thinking, strategy development and the application of capital to its selected target markets Read More

vision and history

To create the leading platform to finance the growth and international positioning of enterprises in its target areas which for its first funds are in India and establish other links with global economies Read More

ideas and thinking

Succeeding in situations that are dynamically shaped by the aspirations of rising peoples, their society, markets and rapidly changing environments - where rules seem to apply but are often rewritten and so require unusual thinking. Read More

investments

We recognise the complex, nascent and rapidly developing and volatile nature of this ancient country's modern markets and economy as they grow and expand internationally and seek to work as partners with leaders who wish to create value from ideas. Read More

team

Our people are international and local, measured and open, imaginative and mathematical, a team and individuals, principals and counsel, skilled and learning... learning to open their own boundaries and others. Read More

philosophy

Our philosophy guides us and also places high demands upon us as we journey in a world that is changing dramatically all around us ... we endeavour to appreciate that the journey itself will make us more fit to journey. Read More

our locations

Greater Pacific Capital operates out of offices in Mumbai, Shanghai, Singapore and London. The firm's investors are international including from the US, Canada, Japan, Europe and the Middle East. Read More