New Delhi: Terming India's GDP number as "overstated", Morgan Stanley's Chief Global Strategist Ruchir Sharma has called for more private investment for the economy to get back on track.
"I think India's GDP data is overstated," Sharma told PTI. Indian economy grew 7.9 per cent in the fourth quarter of 2015-16, taking the overall GDP expansion to a 5-year high of 7.6 per cent for the fiscal. Sharma seemed fine with the overall investment in India, but "it has largely been supported by the government".
"The private sector investment is still not picking up in India," he noted, linking low sustainable inflation to "very high" level of investment. RBI's decision to bring inflation to 5 per cent this year, he said, is in line with emerging market economies' average.
"If you look at all successful economies of the world... China, Korea, Taiwan all grew very rapidly when their inflation rates were low. "There is no economy which does well with high inflation rates. So, you know all miracle economies. In these countries, inflation rates were below emerging market economies' average," Sharma noted.
Referring to Prime Minister Narendra Modi's Make in India initiative, Sharma underscored the importance of market share gains because China is "low on exports and becoming more expensive, their wages have gone up a lot and countries that are benefiting are Vietnam, Bangladesh and Cambodia".
In the same breath, Sharma cautioned that "we should keep our expectations in check". "I have always said about India, this is a country which always disappoints the optimist and pessimist," he added. According to Sharma, higher FDI flows into India is "a very positive story".