Review of Restart by Mihir Sharma

Mihir Sharma is a well known Journalist whose writings I have followed for some time now and hence when I came across his book, Restart: The last chance for the Indian Economy, it was a no-brainer to read the same. While the book seems big, it actually a pretty easy read, divided as it is into 4 main parts and multiple chapters.

Mihir spends 75% of the book (first 3 parts) outlining all that has gone wrong in India. From the multitudes of law that a small factory owner should keep track and obey to the political shenanigans that brought about a few of the big moves such as Bank Nationalisation or the half hearted start of liberalization that was kicked off in 1991.

Anyone who has read his articles knows the fact that he does like our former prime minister Manmohan Singh a lot and this book is not much different out there. Then again, since he is in the circles which had access to him, maybe he is really able to see the part that majority of us could not. But then again, we are digressing from the book.

The problem I find in the book is that Mihir seems to believe that nothing we have achieved in India counts for anything. While the gains we have made in Information Science is placed squarely at the feet of we being a country of cyber coolies, he literally accuses pharma companies of cheating one and all.

The most surprising comment of his I found was his thought that the Ranbaxy Promoters sold to the highly innocent folks at Daiichi Sankyo a “Placebo”. Mind you the fact that unlike we small share holders, the big boys who did their own due diligence which I think includes access to not just the accounts but all the factories and records got cheated because Ranbaxy as like any other “Indian” teenager who when taking a test, cheated when it could and gamed the system when it could not.

In fact, he goes further and says “We are a Nation of Plagiarists”. Isn’t it amazing that when Japan / South Korea / China / ASEAN countries started their journey towards Industrialization, they did nothing different but actually copied what was invented in the West and build it cheaply.

Xiaomi phones have been a huge hit in China and now in India. But try as you want, they are not able to sell the same sweet cheap phones in any developed nations. Wonder why?

Like any true Socialist (though I do not think he is one who believes in their ideology), he more or less seems to suggest that Indian Promoters are a unscrupulous lot. After all, haven’t most of them gamed the system to make undue gains (and once again, the King of Good times is selected for some special treatment what with a whole chapter dedicated to him). And hence his suggestion that rather than leave the field open for private and allow for true competition, he hopes that the government can act as a “Stern Parent Who Supervises Homework Closely”. Good Luck with that I say.

On one hand, he correctly points out about the fact that Banks have accumualated huge Non Performing Assets due to ir-responsibility of some business-family scion, but at the same time does not provide the way out. Today, with much of the banking sector in the hands of the government, the field is more like a Oligopoly. The fact that banks with the highest NPA can raise deposits with the same ease and rates as a Bank with the lowest NPA. This distorts the whole picture and with limited time at the top, any CMD is more interested in securing himself than take on the risk of cleaning up the books.

The final section is devoted to making suggestions about what can be done to change that. While the suggestions on the face of it are pretty good, the fact of the matter is that they are too broad in scope and literally something that seems to be setting as one to fail. After all, regardless of how efficient Modi works, even he cannot do all the things necessary to boost the growth of India in the next 4 years even as he fights one state election after next.

Like Modi, Mihir seems to believes that the easy way to prosperity is by putting up factories, not to sell to ourselves but sell to the world. China is what is is due to the fact that it has a early mover advantage and dislodging someone like that is no easy game.

After all, despite the fact that every state government is wooing IT firms with hosts of benefits, why is that most of them still prefer Bangalore (despite all its ills) to be their first choice? I was reading a article about a IT firm that currently is in Mumbai saying that its next phase of expansion will be in Bangalore since they aren’t able to get the kind of people they want to work out there.

Yes, Manufacturing is important, but with Europe slowing down and China having build up a huge surplus in capacity, it will be tough to beat them at their own game. At one point, he showcases how even Bangaladesh has run ahead of us in terms of Garment Exports. But the reasons are not just due to our laws (which are a major reason, do doubt). The 2013 Savar building collapse showed the risks that were being taken to get there. China has its famous sweat factories and regardless of how we see them, I doubt we want to be like them.

I strongly believe that India shall grow, not because of the government but in-spite of it. Yes, there are a lot of things to set right, but like Sanitation, not all can be changed or righted in a few years and that is sure to disappoint us.

While the book is pretty fast paced read, I would have loved it even more if he could have identified one major issue (say in the Financial Industry) and come out with suggestions on what are the things one could do to set things right. Then again, being a Journalist means that he wanted to touch as many a sector / area as possible without having to make concrete suggestions. After all, how many would have bought the book if it was purely one on what Ails our Banking Industry and the way to set it right.

I give the book 4 Stars out of 5

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About Prashanth

Have been a full time participant in the stock markets since 1996. Run a Yahoo Group where focus is exclusively on discussions of the Indian Markets using Technical Analysis as the tool (groups.yahoo.com/group/technical-investor)
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