Foreword xi
Preface xiii
CHAPTER 1 Understanding India 1
Agrarian Roots 1
India’s Villages 2
The Role of the Family 3
Seven Generations 3
Colonialism and Its Impact on Indian Villages 6
Deep-Rooted Beliefs and Aspirations 9
Spirituality and Superstition 14
Villages Are Not the Same Anymore 16
Urbanization Is Changing India 17
Summary 18
CHAPTER 2 Government, Politics, and the Media 19
Is India One Country? 19
Democracy 21
The Rise of Regional Parties 22
Competition among States Is Healthy 38
The Goods and Services Tax 39
Is Democracy Holding India Back? 40
State of Political Affairs in India 42
Bureaucracy 44
Corruption and Rent Seeking 45
War, Terrorism, and Violence 48
Role of the Fourth Estate and Accountability 49
The Ultimate Free Market 49
Summary 50
CHAPTER 3 The Economy 51
Overview of the Indian Economy 51
India’s Unique Economic Model and Its Legacy 55
India’s Public-Sector Undertakings (PSUs) 56
Monsoons and What They Mean for India 60
The Problem of Indian Agriculture 62
Manufacturing in India 65
India’s Infrastructure Defi cit 69
India’s Services Economy 73
India’s Natural Resource Wealth 74
Savings, Land, and Gold 77
The Macroeconomy 78
Summary 80
CHAPTER 4 Financial Architecture 81
History 81
The Banking System in India 83
Nonbanking Finance Companies 85
Financial Inclusion 87
The Reserve Bank of India 91
Equity Markets 97
Market Participants 99
Bankruptcy and Foreclosure 101
Risk and Capital 105
Summary 106
CHAPTER 5 Value Investing in India 107
Risk On, Risk Off, and Global Capital Flows 107
Liquidity, Volatility, and Risk 110
Value Traps 114
Corporate Governance 115
Capital Allocation 118
Business Fundamentals 125
Financial Strength 128
Relative Opportunity 128
Summary 130
CHAPTER 6 Looking Back 131
Real Estate 131
Private Equity 135
Equity Markets 139
Foreign Direct Investment 141
Debt Markets 142
Entrepreneurs and Businesspeople 143
Summary 144
Afterword 145
About the Companion Web Site 149
About the Author 151
Index 153