India at 75 – hits & misses, a perspective by Manish Chokhani

India is celebrating its 75th year of independence this year. And as we look at the achievements of these past 75 years, India has made great strides in all aspects of economic growth. The growth has been phenomenal, especially since 1991 when India opened its doors to foreign investments and embarked on a liberalised regime.

The Indian economy has grown 10 times from a gross domestic product (GDP) of $275 billion in 1991 to $2.97 trillion in 2022. The country's rank in terms of the size of the economy has risen from 16th to sixth, and very soon should be fifth in terms of GDP growth.

In terms of market capitalisation, the BSE 100 companies have grown from just $45 billion in 1991 to $2.12 trillion as of March 2022, a humongous growth of 48 times.

That said, “Our engagement with the external world, which is our imports and exports combined, have risen 20-fold from 1991, which clearly tells us that we did something right over the last 30-odd years,” said Manish Chokhani, Director, Enam Holdings Pvt Ltd, in an exclusive chat with CNBC-TV18.

A lot of Indians have gone all over the world and made a name for themselves running the largest corporations and indeed some of them are in the highest echelons of government in the world. So yes, Indians have done well, said Chokhani.

Chokhani highlighted the positives that India has witnessed over the past years as he said, “We all know the great story of the remittances coming back to India from the Indian diaspora. We know the grand success story of the IT sector over the last 30 years, which has raised the flag of India all over the world and given us so much respect,” he said. “Today, we are self-sufficient in most of our agricultural products and industrial products.”

He believes that the vibrant democracy which has kept this country going is something to be happy about and cherished. According to him, this is an era when India can surpass bigger economies, and in the next decade become probably the third-largest economy in the world, with per capita income of over $5,000.

But, not all has gone right during these past years. India could have been in a still better position if not for some slip-ups.

They say, if you're not socialist when you're 20, there's something wrong with your heart, and if you're not capitalist by the time you're 50, there's something wrong with your head. “So, India made the choice in the early years of turning towards socialism, and I think we didn't pivot at the right time while liberalisation happened, as we didn't accelerate the way one should have. And that led to the lag for India,” added Chokhani.

China with a near-similar size of population but a very different way of governance is today five times the size of the Indian economy. “I think, where we missed out, unlike China which pivoted from communism towards a controlled capitalist society, is our excessive tilt towards socialism. And that, in a way, squeezed the government's ability to fund infrastructure, health, education, and so on.”

Chokhani felt that India completely missed the plot in terms of getting externally-oriented, putting in place external benchmarks for energy security, military self-sufficiency, building skill-sets, and pursuing exports on a mission mode. India has remained in a ‘follower’ mind-set, where the country was not creating global brands, but remained content exporting commodities, services and generic drugs.

That said, no one can take away the credit from the fantastic job done in IT, he said. “Without these IT services exports, without the pharmaceutical exports, without our engineering exports, God knows where India would have been,” he pointed out.

Compared to many other countries India has had great achievements. “It's been the lack of a leader mind-set which says we are a country which can take on the world and we have the resources to do that.”

Chokhani commended how India kept its culture, ancient traditions and spirit of enterprise alive despite 700-800 years of foreign rule. “I am continuously optimistic about what lies ahead for India. It’s a journey which is half complete. The next decade or two look even more exciting,” Chokhani said.

He said that India is on the cusp of a massive capital expenditure phase. “This whole unleashing of the entrepreneurial energy of the youngsters with ample capital available from the world, and indeed from Indian offices where family offices have flourished and a lot of money is coming into mutual funds…so capital is not dirt anymore.”

The policies are getting better and in favour of business, all the trend lines are in the right direction, he said. “I do think there's no reason to doubt that this country will give you a 15 percent compounded return over a decade and a $5,000 per capita income at the end of a decade from today,” he said.