#weeklyinsight

A fascinating survey of religion in India by the well-known Pew Research Center finds that 97 per cent of Indians believe in God. Only in sub-Saharan Africa and some regions with large Muslim populations are people more religious than Indians, says the study, pointing out that similar surveys in Europe, the US, Israel, Latin America and the US found those societies to be much less religious. Not only are we more religious, we are also very proud of our respective religions—Indian Hindus of Hinduism, Indian Muslims of Islam, Indian Buddhists of Buddhism, Indian Christians of Christianity and so on, finds the survey. Irrespective of our religion, we are all very proud to be Indians and also proud to be residents of our respective states. What’s more, 90 per cent of us agree with the statement that ‘Indian people are not perfect, but Indian culture is superior to others’. Cosmopolitanism doesn’t have many takers.   Thankfully, in spite of being both religious and nationalist, we are great believers in religious diversity. The survey says, ‘Indians see religious tolerance as a central part of who they are as a nation. Across the major religious groups, most people say it is very important to respect all religions to be “truly Indian.” At the same time, most of us believe that religious identity is to be zealously guarded. A sizable majority of Indians say it is “somewhat” important to stop people from entering into interreligious marriages. That insularity extends to our caste identities as well---the survey finds that majorities in all the caste groups say it is very important to prevent inter-caste marriages. We seem to believe, as the poet Robert Frost put it, ‘Good fences make good neighbours’. We explored the political implications of the survey’s findings in our piece on how Indians view politics through the lens of religion. You can find the full survey here. An important economic insight from the survey is that unemployment tops the list of national concerns, with 84 per cent of Indians saying it’s a very big problem, the next biggest being corruption. The survey was conducted just before the pandemic, so unemployment has only got worse since then. Nevertheless, there should be some improvement as the recovery builds up, as our Economic Recovery Tracker shows. Other positive signs include our Herd Immunity tracker which says 29 per cent of the population has been vaccinated partially, while Monsoon Watch shows a good start to the kharif season. At the global level, the JP Morgan Global Manufacturing PMI shows that the upturn in the manufacturing sector continues, but stretched supply chains are driving up costs, which are getting passed on to consumers, resulting in higher inflation. The Bank for International Settlements says it is pleasantly surprised by the speed of the recovery and ‘the craving for normality has prevailed’, while painting three scenarios for the future. We found, though, that the manufacturing recovery in much of Asia lost momentum in June due to a resurgence of infections in some countries. In India, the manufacturing sector contracted during the month. The government has stepped in with some relief measures, but we showed that it wouldn’t help much for the microfinance sector, nor for the tourism and hotels sector. Despite the almost universal clamour for a fiscal stimulus, we argued that this may not be the right time for it.   CMIE data showed that the second wave hit investment demand. Also, higher inflation and the RBI’s fire-fighting measures have led to the 10-year government bond yield losing its relevance as a market benchmark.   Nevertheless, as business returns to normalcy with the easing of the lockdowns, companies are regaining their confidence. Mishra Dhatu Nigam is stocking up on capex ammo. Ashok Leyland is ready to ride the economic recovery. June auto sales show the waning impact of COVID-19.UPL’s global CEO told us in this interview he sees potential for steady growth. Subros is banking on plenty of growth drivers. IT firms are set to clock their best growth after COVID-19 began. The acceleration in demand across major economies will benefit Allcargo Logistics. Good traction in execution and projects will drive growth at Power Grid. And the return of pent-up demand should augur well for Thangamayil Jewellers. The emerging data centre boom is worth keeping an eye on, as many sectors will benefit from it. Indeed, new sectors are set to drive the capex revival.   The RBI’s financial stability report, usually full of gloomy predictions, has struck a relatively optimistic note this time. Repco Home Finance management’s guidance is upbeat on asset quality. Steel sector valuations, however, will have to pass the China stress test. And IGL Refractories’ fortunes are tied to the steel sector. After impressive gains, questions have arisen about how far the markets can rise. This FT piece says too much confidence is placed in the view that the rise in inflation will be temporary. We looked at market participation data to gauge whether the ground beneath the Indian market is shifting. The Pew Research survey threw up a worrying statistic—as many as 48 per cent of Indians believe in a ‘strong leader’ as against 46 per cent who said they preferred democracy. This finding echoes a 2019 survey conducted by the Centre for the Study of Developing Societies (CSDS) which asked Indian adults whether they agree or disagree with the statement that “The country should be governed by a strong leader who does not have to bother about winning elections.” Roughly six in ten Indians agreed with the statement. To be sure, as we argued in this piece, late developing economies almost always developed, at least initially, under authoritarian rule. But surely even a cursory look at countries around the world, including neighbouring Pakistan, will tell us that autocrats need not always be successful, right? The answer, I think, lies in the Pew Survey. It finds that while 49 per cent of Indians believe in angels, only 37 per cent believe in demons.  

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