As opposed to China, I am bull on the long term prospects for India, but some of the stuff coming out about emerging markets these days is just silly. Compare the remarks of to CNBC of Morgan Stanley’s Jonathan Garner, Sanjay Shah and Ridham Desai

http://www.moneycontrol.com/india/news/fii-view/india-key-outperformer-among-emerging-mkts-morgan-stanley-/399974  with those of Arvind Virmani, the India’s prime minister’s chief economic adviser as quoted in an article published in the Economist last December.

Another illustration that financial advice is about marketing, not reality. We are still in the middle of a severe global recession. It does and will affect everyone, even India. The good news is that it is not a Great Depression, but that is a far cry from providing an economic back ground for topping 2008 highs anywhere.

William Gamble

Desai: Yes, well, our bull case does call for a significant upside to the market and that is predicated on policy response from the government if it exceeds current expectations. So I think the market expects the government to do something on infrastructure, something on fiscal consolidations, something on banking and insurances, retail and maybe a little on FDI (foreign direct investment), and if the government surprises us by handing out several road contracts over the next few weeks, comes out with a budget which has tax cuts in it, which removes the surcharge on corporate tax, removes the FBT (fringe benefits tax), which cuts taxes across the board, revives consumption growth, which raises an infrastructure fund to undertake some large-scale infrastructure activity, then who knows...our growth estimates could be severely underestimating the prospects of India and the market could well come to new highs in 2010. ...As it is our bull case for this year is somewhere around 19,500 (points), which is not very far away from where we were at the peak of 2008.

cnbctv18@livemint.com

Asked what reforms are most pressing, Mr Virmani tosses over a book in which he describes them. They include, in order of importance: fiscal reform, including of subsidies; privatisation of public enterprises; opening state-controlled banks to more private ownership; reform of India’s throttling labour laws; and liberalising certain industries, including coal and sugar. Mr Virmani’s book was published in April 1999. Hardly any of its prescriptions, he notes, have been followed: “We have to start acting faster.”