Along with the unshackling of the Indian economy, with controls falling by the wayside one by one, the other change of gears is an acceleration towards an international integration. During the past four years, the Indian economy has become far more globalised than ever before. This increase has been a two-way exposure. Not only is the country attracting business and capital through contracts, joint ventures and foreign direct investment in sectors from infrastructure to technology, Indian companies are going out and buying companies abroad.

In the markets the number and quality of participants have increased — foreign institutional investors, domestic institutions, mutual funds, insurance companies, foreign pension funds and, of course, small investors/speculators. Overall, it has deepened, liquidity has amplified and India is a $1.4 trillion stock market today, up 40 per cent in less than a year. This market is serving and profiting largely from a rebuilding of India’s infrastructure and the labour price arbitrage in the technology and outsourcing space. As a result, the weightage of political instability in being able to influence the market has fallen and hard numbers seem to have taken charge.

The hard numbers stand strong on macroeconomic performance as much as on firm level execution. The India story stands on four legs. One, it is the fastest growing democracy in the world. Two, it has delivered the highest returns worldwide. Three, opportunities and their execution moving ahead at a furious pace. And four, a growing domestic consumption and investment. Besides, the multipliers of investment in infrastructure and education (which is going to see a five-fold increase in expenditure in the Eleventh Plan), will continue to, well, multiply returns.

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