Greetings from Team Carnelian!
It is said when you zoom out and look at something over a longer time horizon, things look much different than when you are zoomed in, in a narrow time frame. What you choose, determines your approach and outcome. When most people are focused on short term market movements & valuations, we zoomed out and looked at what are the possibilities and probabilities as India looks to become a developed nation – Viksit Bharat over the next 25 years – India’s Amritkaal - the period of a new beginning of greater prosperity for all.
Origin of the word Amritkaal can be traced back to the Vedic astrology, denoting “a crucial period during which gates to greater pleasure and prosperity are open for humans, angels, and other creatures. It signifies an auspicious time to initiate new endeavours.”
A golden glorious past - moving towards re-gaining glory …
We all know, “Sone ki chidiya” ~ (“The Golden Sparrow”) was commonly used for the Indian sub-continent during the pre-medieval period. India was the epicentre of global trade back then. Indians used to command global influence, the way Americans had in 1950s. Medicine, education, mathematics have their deep-rooted origins in India.
Medicine – Ayurveda, Charak-Samhita, Sushruta-Samhita, Yoga
Education – Nalanda, Takshashila, Vedic Maths
Mathematics – Zero, Aryabhatta, Ramanujjan
India was 23% of the global GDP during the 17th century; US, at its peak was ~29% during 1950-60s. Unfortunately, centuries of invasions, plunders and loot shrunk that to a mere 3% of the global GDP when we became independent in 1947. India lost all its invaluable knowledge when Nalanda was attacked. (It took almost 3 full months for all the books at Nalanda to burn down– just leaves us to imagine how vast and deep of a treasure India lost!!)
“On your way to greatness, you will fall, but like a Phoenix rising from the ashes, you too shall rise again.”
- Michael Bassey Johnson
After ~500 years, the world is again witnessing the rise of Indian influence at the global stage. After a long period, Indians have started getting the confidence of “hum kisi se kum nahi”. India has not only carried out long pending necessary reforms but also implemented innovative solutions at scale – Vaccine, UPI, DigiLocker, CoWIN, FAStag and the entire digital infra. There is a tectonic shift in the way the work is happening in India. Road construction, railways, infra and entire logistics sector is undergoing a tremendous uplift. Despite budget constraints, India has made milestone achievements in space science – becoming the 1st nation to land on Moon’s South Pole. India is the 5th largest economy now vs 10th largest 10 years ago. India has become an important voice in geopolitics. India is on the global map now. Nonetheless, Indian stalls at World Economic Forum are going full house. Global corporations and leaders are looking at India with a very different perspective.
Prime Minister Modi has placed a vision of India being developed nation by the time she turns 100.
Let us examine why, how and what of Amritkaal
India at the global centre - will become a Developed nation (Viksit Bharat) by 2047 with a GDP of USD 29tn
The Indian economy is standing tall at the global centre stage and has emerged as a strong alternate to China. The country has undertaken robust structural reforms. This we believe, will take the Indian economy to USD 29tn GDP by 2047. India’s per capita income will increase from USD 2400 to USD 18,000. What makes us believe so?
Decisive and stable political leadership
Foundation laid through series of structural reforms
Tectonic shifts in the way we approach
Decisive and stable political leadership
India is the largest democracy of the world. After a period of 25 years, India elected a clear majority non-coalition government back in 2014. Time and again, the world has witnessed that a stable and strong leadership uplifts the entire nation.
We have ample evidence of countries which have become prosperous due to a decisive leadership. Abraham Lincoln for the US, Deng Xiaoping for China, Lee Kuan Yew for Singapore, Sheikh Mohammed bin Rashid Al Maktoum for Dubai are few examples of how a strong leadership can change the fate of an entire nation. India is at an inflection point such that the entire country is going to see exponential benefits of a decisive and stable leadership.
The current government, and the leadership especially, has remained successful in providing a stable political environment, steady and firm policies, business friendly approach, capex-oriented mindset, etc. Off-late the country has seen co-operative competition amongst states to grab the national business share. Ease of doing business ranking has gone up from 142nd in 2014 to 63rd in 2019 (latest data available was in World Bank Report 2020). This has resulted in India attracting USD 632bn of FDI in last 10 years (FY14-23) vs USD 273bn in FY04-13.
Foundation laid through series of reforms:
Decisive & visionary government has made it possible for the policy makers to ensure, hard but much needed structural reforms. From the period of 2014 to 2024, foundation for Amritkaal period is laid through a series of reforms on 3 major fronts:
Digital Transformation - Digital identity (Aadhar), Payment gateway (UPI), Open Credit Enablement Network (OCEN), ONDC, Aarogya Setu, Ayushman Bharat, CoWIN, DigiLocker, DigiYatra, Mpassport, FAStag etc.
Economic Reforms – Goods and Service Tax (GST), Insolvency and Bankruptcy Code (IBC), Real Estate Regulation Act (RERA), Jan Dhan, Production linked incentives (PLI), Atma Nirbhar Bharat. PLI schemes and Atma Nirbhar Bharat programme are increasing India’s appeal as a global manufacturing hub.
Infrastructure Reforms - Railways – high speed rail, Vande Bharat, DFC, Roads/Bridges – Bharat Mala, Atal Tunnel, Chenab River Bridge (world’s tallest railway bridge), Dhola Sadia bridge (India’s longest bridge), Airports – UDAN, Smart City Initiative, Others - Ports, Sagar Mala, Gati Shakti Yojana, Inland Waterways.
All these structural reforms are providing a firm and a stable foundation for the growth that will follow in India’s Amritkaal.
Tectonic shifts in the way we approach:
We believe while the above-mentioned reforms have laid a strong foundation for Bharat Amritkaal; but what is even more important is the soft foundation in form of mindset and culture, the way we think. There is a big tectonic shift which has happened/ happening across the country, which is what makes us believe why this is possible. India always had potential but somehow always struggled to realise it due to various reasons. One always needs a catalyst to make it happen. The last ten years of work on changing mindset & culture is what makes us believe “This time it’s different” and India will be able to achieve its goal of Viksit Bharat by the time she turns 100. Let us see what these reasons are:
Exponential mindset – Post independence, India’s growth got branded as Hindu rate of growth and incremental mindset became our culture since then. Improving better than previous year was the only benchmark of the then culture, what we call incremental mindset. First time India has moved from an “Incremental” to “Exponential” mindset on the development process. Setting BHAG (Big Hairy Audacious Goals) which was only within the realm of corporates, has become a part of political governance now. Executing programs and projects at a speed almost impossible to think earlier, have become part of practise now. Opening Jan Dhan accounts for 40% of Indians in less than 2 years, power for all in less than 5 years, DBT (Direct Benefit Transfer) at scale are only few examples of this. Sense of urgency led to unprecedented speed & pace of execution. Even in the private sector, companies are now able to execute everything in a fraction of time. A private company executed a 1,000-bed hospital in less than 12 months’ time from land clearances to inauguration. This was unheard of in the past. All this has increased the confidence of people at large and ours too.
Finding our own unique “Best in class, innovative & technology driven solution” – Historically, India always looked up-to or was preached by the West for solutions to her problems. Be it 1991 crisis or 2013 fragile five situation, any development model, India borrowed or copied from the West. This is no longer the case. India has developed the mindset of innovating and finding its own solution. Scrapping of The Planning Commission was of course a first step in this direction. Be it UPI, GST, ONDC, Covid vaccine India has carried out innovative, unprecedented and sustainable solutions for 1.4 bn people. This has happened for the first time in the world and is now becoming a model for the rest of the world. It is this mindset which is energizing India and her people to think: big, innovative, beyond, which is the doorway to a developed nation.
Scale delivery at low cost – India is executing scale at a low cost. Given India’s size and income profile, it’s important to find a solution to India’s problem in a low-cost way, if one must impact & improve the life of the lowest strata of society. UPI is a classic example which has led to penetration of the remotest, smallest, and poorest areas. Getting unlimited data at less than USD 2 is outside the scope of thought of many global players which JIO delivered.
Mindset of balancing social welfare & development – Historically, social welfare (socialism) and development (capitalism) were seen at odds with each other. Not anymore. The current government has taken both with equal amount of seriousness and massive effort to balance both. While the world is still discussing/debating about Universal Basic Income (UBI) India has already implemented it in the form of Direct Benefit Transfers (DBT). Today, poor women, students and the underprivileged are getting direct benefits without any leakage or corruption. At the same time the government is unapologetically working on business reforms, promoting businesses, ease of doing business and being business friendly. More than 200 mn people have been lifted from poverty, at an unprecedented scale. It is this “inclusive growth mindset” which balances socialism and capitalism, is what gives us the confidence that India will be able to become developed nation.
Changing global stature & perception - Last but not the least, we all have felt and seen how India’s global stature has undergone a significant change. India is assertive and unapologetic about protecting her own interests (e.g. Russian Oil), yet being available to all in times of crisis by extending a helping hand. India has been able to maintain a friendly relation with almost all-important blocks in the globe. China is of course a tricky one, but India has managed it well. India is being looked upon by many countries as a helping hand, a very big departure from the past. This will have huge economic, social and political benefits. Whenever a nation acquires leadership respect, it has huge economic benefits as well. It’s this India’s quest to become Vishwa Guru / Vishwa Mitra, which makes us believe that India will become a developed nation.
Plethora of opportunities opening
As the Indian economy transitions to a developed nation – Viksit Bharat by 2047 with a GDP of USD 29tn (~7x from today), investing in India today, is a once in a lifetime opportunity, like the Japanese Economic Miracle, leading to significant wealth creation during the Amritkaal period. India will continue to command a premium attracting massive flows both domestic & foreign. We also believe that INR will not depreciate further as we move from Current Account Deficit to Surplus like how China, Japan, Korea did. India will be one of the fastest growing large economies in the next 25 years. Whenever, any large economy grows at a healthy pace, it opens opportunity for varied and new sectors to emerge.
India is standing at an inflection point and is going to experience its “Amritkaal” period over the next 25 years. The underlying currents are very strong. We believe this is the ideal time to invest in India’s Amritkaal and reap the benefits of multi-year compounding.
We are very excited about the launch of our new fund “Carnelian Bharat Amritkaal Fund”, which will help us capture these mega trend opportunities.
We will be talking about some of these Mega trends in detail in our upcoming letters.