India’s growth story takes a leaf out of Akbar-Birbal Kahani, says Nilesh Shah

Nilesh Shah

India’s growth story is shining brighter because the other stories have become much darker, said Nilesh Shah of Kotak AMC in an interview with Moneycontrol on July 31.

“Something like Birbal ki kahani has happened with India. When Akbar told Birbal to make a line bigger without touching it, he drew a small line below, and the line above became bigger. The same thing is happening with India. Our growth story was bright, but the other stories have become much, much darker. And hence, our story looks even brighter,” he said.

As per IMF data, India’s GDP growth estimate stands at 6.1 percent which is the fastest in the world for FY24. This is almost double the growth rate prediction for the global economy which stands at 3 percent for FY24. The US economy is expected to grow at a lowered rate of 1 percent while the European economy is expected to grow at 1.5 percent. The Chinese economy is expected to grow at a 4.5 percent rate while Germany becomes the only major economy to face recession with an estimated 0.3 percent contraction during the year.

Shah believes that the limited number of investment options for foreign investors in the Chinese, Russian, South African or Turkish markets is what is directing flows towards India. The investors from foreign and domestic fronts are bullish on the Indian markets, observed Shah.

He cited the IMF prediction that India will become the third-largest economy in the next couple of years. Shah believes that government intervention accompanying the private sector is making corporate India global and displaying visible growth. “Between these two extremes, short-term uncertain, long-term fairly certain, medium-term will probably swing between fear and hope. My bet will be short-term, keep some dry powder for correction, medium to long-term stay invested for participation in India growth story,” said Shah.

The market expert sees volatility in the short term, especially with the elections and Fed rate hikes bringing potential surprises that the markets have merely discounted as positive. While there is uncertainty and a possibility for a correction in the short term, Shah is optimistic in the long term perspective.