We have to reform our judicial infrastructure. An entrepreneur will invest when he is convinced that there is the rule of law. What have we achieved in reality? Forty lakh cases of cheque bouncing are clogging up the judicial system. We pass a law which says that if your cheque bounces three times, you will go behind bars. We need to bring rule of law in the country. Air India, BPCL, IDBI, LIC, Container Corporation, Shipping Corporation, Neelachal Ispat - if all these things get divested, then imagine the benefit this country and the economy will get.Īll this is changing India like never before. From the government running all the businesses to the government saying that we have no business to be in business, is a big mindset change.
Also, public-private partnership is emerging. Earlier, we were a capital-constrained economy not any more. In India, it is happening instantly, thanks to RTGS and NEFT, among others. Today, in a developed world, if you want to transfer money from one bank to another bank, it is a seven-day job. We are also moving from physical to physical-digital infrastructure. Our power consumption has gone through the sky, but are also able to produce power. Now we are becoming an infrastructure-available economy. Fast forward to 2021, we have a$636-billion reserve… For most of our 75 years, we were an infrastructure-deficit economy. Pre-1990, we were always short of foreign exchange reserves. That is a big change in the economic fundamentals of India. We have shifted from double-digit inflation to mid-single-digit inflation. In the pre-90s, the villain in most of our Hindi films was a black marketeer - Roti Kapda aur Makaan, Kalicharan and so on. Sandeep Singh: What makes you confident that markets will rise in the medium-term? It will take some time to correct and consolidate it. The momentum of the market now is a bit negative. So we are seeing more correction in this red zone than in the green zone. And generally, they make the top of the market. Now all these stocks too have to come to an end. Some of them have gone up as high as 8,000%, some 4,000% and some by 500%. Second, in every bull run, we see operators pull up prices of, let’s say, penny stocks. Now at some point of time, the law of gravity will apply and those stocks have got corrected. That concentrated holding allows people to put any price on those stocks. In the red zone are stocks, where floating stock is limited and there is a concentrated holding.
I believe, in the market, there is a red zone and a green zone. However, every correction is an opportunity to buy into the market. In the near future, I think the corrections will continue. How do you see this and do you expect to see the correction continuing? Sandeep Singh: From a peak of around 62,200 a couple of weeks ago, the Sensex lost around 5% or 3,000 points over the last week. This session was moderated by Associate Editor Sandeep Singh. Nilesh Shah, MD of Kotak Mahindra AMC, explains why he is confident about India being a “long-term growth story” and why markets will “continue to correct”, says he doesn’t believe RBI will increase interest rates to a level where it derails growth, and calls for regulation of cryptocurrencies.