Worst is over: Mobius positive on India's prospects

For those who look at growth opportunities in emerging markets now, India, despite its slowing economy, is a country with good potential.

“We remain positive about the long-term prospects of the India economy and its companies and looking to take advantage of the recent volatility,” Mark Mobius, executive chairman, Templeton Emerging Markets Group, said in an interview in The Economic Times today.

A firm believer in the emerging markets, he thinks global investors’ exposure to such markets will continue to rise, as these economies are projected to grow well, have youthful population and have better debt-GDP ratios.

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Though in a highly inter-related world, the EMs will be impacted by the global risk outlook even if their fundamentals are strong, the prominence of these markets have increased ever since the global financial crisis of 2008.

“Be it the IMF, World Bank or G20, there is increased acceptance that EMs need to be accorded higher representation,” he said. According to him, India has seen the worst of the downward cycle and now improvement is on the cards.

Accepting that the government here has show better commitment to end a policy paralysis, he, however, urged the government to reduce its role in the economy by privatising all of the state-owned enterprises.

Mobius praised the Reserve Bank of India for keeping the rates steady and said the real culprit behind inflation is “low productivity brought on by excessive government regulation, high taxation and restraints imposed on private sector”.