Patna : Any country or economy prospers only when the citizens have faith in the country, hope from the leadership of the moment and the courage to bet on the success of its economy. In the wake of the CORONA crisis it appears that vast majority of Indians have faith in the country and also have hope that the present leadership is capable of delivering. But a large percentage needs to have the courage to bet on the success of the India story.
A comparative analysis of the equity markets of the USA and India shows that Indians are hesitant in backing their companies, industries and businesses. Very few people may have noticed that during the last one month Nasdaq (the index showing the composite representative value of listed American equities) has risen by over 30 percent.
During the same period, NIFTY (the index showing the composite representative value of listed Indian equities) has fallen by more than 23 percent.
Nasdaq hit its 52-week high (9838.37) on February 20, 2020, and its 52-week low (6631.42) on March 24 this year.
In comparison NIFTY had hit its 52-week high on January 20, 2020, (12430) and hit its 52-week low (7511.10) on March 24, 2020.
Both Nasdaq and NIFTY hit their 52-week lows on the same day – March 24, 2020.
Yet because of greater faith shown by the American investors in their companies, industries and businesses, Nasdaq recovered from its low of 6631.42 to 8,634.52 within a month – an increase of about 30.2 percent. Indian NIFTY, however, touched 9,154.40 on April 24, 2020, from its March 24 low of 7511.10 – an increase of only about 21.87 percent.
In view of the fact that the American population has really been hit hard by the CORONA virus as well as the fact that the numbers of both infected and dead are many times more in the US as compared to India, one would have expected a greater show of faith, hope and courage to bet on the success of the India story by the Indian citizens in general and Indian investors in particular.
India’s population is nearly four times that of the USA. The total number of CORONA infected persons in India stood at approximately 24356 as compared to the 8,95,072 in the USA on April 24, which is roughly about 37 times that of India. Similarly, the total number of deaths because of CORONA virus in India was 778 as compared to the total number of deaths in the USA which stood at about 50,952. The number of deaths in America is nearly 65 times the CORONA – related deaths in India.
In view of the much better position of India regarding COVID-19 related infections and deaths at the global level, and also in view of the established fact that India is a self – consumption economy, it appeals to reason that Indians need to exhibit greater courage to invest in their own businesses, industries and companies.
If Indians do not back their own economy wholeheartedly, the world is never going to believe in the great Indian success story.
Armies win wars not because of superior numerical strength but because the winning army had shown greater courage of conviction and greater belief in its ability to win the war!
Indians have shown hope and faith, they need to back it up with courage of conviction also! If they hesitate now, such an opportunity may not come India’s way again in the near future.