Chairman of Soros Fund Management, George Soros believes that India is currently the flavour of the world and it has become important politically. According to him, India's growth rate has improved on per capita basis.

In comparison to China, Soros prefers India and informs that they have invested more in India. However, he clarifies that they have not invested USD 1 billion in India, as has been reported.

He feels China has the danger of a financial crisis due to non-democracy. He also adds that India earlier suffered from government intervention in policy.

He fmentions that they have fairly large positions in some real estate, financial services and infrastructure sectors.

Excerpts of CNBC-TV18's exclusive interview with George Soros:

Q: You said that India to you seems a fundamentally stronger investment story than China. Is that correct?

A: That is right because India is a democracy and China is not. A growth in particular financial markets don’t grow to heaven, they usually have serious corrections. When you don’t have a good political system, if you have a financial crisis, it is liable to turn into a political crisis. That’s what happened for instance in Indonesia, after 15-20 years of very high growth, eventually other financial crisis turned into a political crisis. That is the danger in China because it’s not a democratic country.

Q: Do you have anything specific that you have noticed as danger signals in China that prompts you to say that or is it a more general inference from a democratic versus non-democratic society?

A: I think there is no immediate danger of any kind of a political upheaval in China. But the rulers are very nervous about colour revolutions, maybe unduly nervous. This is a very bad development because as a result, they have stopped the political opening, they are cracking down on media freedom, on civil society. This actually increases the danger eventually of a political crisis.

Q: Do your investments reflect this bias within your thinking that India is stronger, are you more invested in India than in China?

A: Somewhat yes.

Q: From market folklore, we understand that you could be about a billion dollar invested in India. Is that a correct estimate?

A: No, its not.

Q: It’s not that much?

A: No, it’s not that much.

Q: In what kind of asset classes would you be distributed in India?

A: I don’t do it myself; I have got a team that is doing it. But they are heavily invested, actually they want shares in your television company, which is a full disclosure, I think it should be mentioned. They have fairly large positions in individual companies, some in real estate, in infrastructure and in financial services.

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