Indian state capitalism looks to be in trouble

I ndia’s stockmarket swooned upon the news that Narendra Modi, the country’s business-friendly prime minister, would return to power diminished and in a coalition after a recent general election. One benchmark, though, fell especially sharply and has yet to recover: the Bombay Stock Exchange’s index for Public Sector Undertakings (BSE PSU). It comprises 56 companies that have some private ownership but remain mostly owned, and entirely controlled, by the state.

This curious corporate structure dates back to India’s independence from Britain in 1947 and the country’s subsequent embrace of state planning, which was extended to encompass, in the Marxist-infused language of the time, “the commanding heights of the economy”. This came to include companies in everything from aviation and insurance to artificial limbs and banking. Only when India’s economy opened to the world in the 1990s did the approach change. Since then, politicians have tried, with varying degrees of enthusiasm, to put firms under private control.

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The country’s gratuity madness may soon calm, so long as Donald Trump does not get his way

It is tempting to tax them during their lives. It is wiser to do so after their deaths

The continent is failing to adapt to a renewables boom

Investors are willing to follow whichever narrative paints the rosiest picture

The country’s next prime minister faces a brutal fiscal crunch

In America, Australia and parts of Europe, property markets have shrugged off higher interest rates

A source: www.economist.com/finance-and-economics/2024/06/20/indian-state-capitalism-looks-to-be-in-trouble