"We think that there is a combination of cyclical factors and policy missteps in India and those could be reversed," said Barger
Policy missteps, along with some cyclical factors, have led to the decline in equities in India, said Teresa Barger, co-founder and CEO of Cartica Capital on July 31.
"We think that there is a combination of cyclical factors and policy missteps in India and those could be reversed," said Barger in an interview with CNBC-TV18 while speaking at length about how bad the situation is for the Indian market even as things become challenging for the global market.
“I would say India has had some excellent policy reforms but many of them have led a structural deflation and things like agricultural marketing reforms, roads, bankruptcy reforms, many of the great reforms have led to a fall in inflation,” she said. She added that larger rate cuts were required from the Reserve Bank of India (RBI).
"The time for fixing problem is now on rates as well as liquidity situation," she said.
“Monetary and fiscal policy are both being too tight. I think they tightened up on the fiscal too soon and that was a mistake. On the tax part of the fiscal, I think the taxes they proposed do not make a lot of sense to us particularly the dividend distribution tax,” said Barger.
According to her, India is becoming less attractive to foreign investors.
However, she said that there are still a lot of good companies in India, some of which are available at 5-6 year lows.
"We have brought down our India exposure over a period of time but remain overweight on India despite lowering exposure," Barger said, adding she is "bullish on the long-term India story."
According to her, Cholamandalam Investment and Finance Company is well-priced at current levels.
On the automobile sector, she said that policymaking for the industry needs to be better thought out.Source: CNBC-TV18Are you happy with your current monthly income? Do you know you can double it without working extra hours or asking for a raise? Rahul Shah, one of the India's leading expert on wealth building, has created a strategy which makes it possible... in just a short few years. You can know his secrets in his FREE video series airing between 12th to 17th December. You can reserve your free seat here.