india lens II · macro · thu 14:00 · SOF team
three more stories. bigger weather.
this morning gave you GDP, the repo rate and inflation. now watch each one break something, or build something, in the real india.
SOF teamdiscussion, not lecture
case 1 · 2016
demonetisation: what an average hides
8 november 2016, 8pm: the ₹500 and ₹1000 notes are void at midnight. someone in your family stood in an ATM queue that week. and yet the GDP prints that followed looked almost normal. the number wasn't lying. it was averaging.
86%of currency in circulation, by value, voided overnight
~99%of the banned notes eventually came back to the banks
~7%the GDP growth still reported in the quarters after
the informal economycash-run, employing most of india, took the hit the average smoothed away
argue it
GDP said 7%. the queue outside the ATM said otherwise. which number was lying, and to whom?
case 2 · 2022
the funding winter
the 2021 flood ran on near-free money. then inflation arrived, and central banks turned the dial hard the other way. the chain from this morning ran in reverse: dear money, capital retreating to safety, and valuations built on cheap capital repricing brutally.
4% → 6.5%RBI's repo rate, may 2022 to february 2023
0 → 5%+the US fed, even faster. global money got expensive together
~$36bn → ~$10bnindian startup funding, 2021 vs 2023
down roundsthe polite term for a valuation meeting reality
argue it
a rate decision in mumbai killed a valuation in bengaluru. trace the chain, link by link.
case 3 · 2020 onward
the k-shaped recovery
after covid, the economy did not recover. two economies did, in opposite directions. the formal, listed, salaried india climbed the upper arm of the K. the informal, small, cash-run india slid down the lower one. one country, two slopes.
2xthe nifty, within 18 months of the 2020 crash
stagnantrural wages through the same period
SUVs uppremium demand boomed while entry-level two-wheelers stayed below pre-covid sales
share shiftlarge formal firms absorbed the markets small informal ones lost
argue it
one economy, two directions. which arm of the K is your mission business on, and how do you know?
next
lab B at 15:00.
zepto again, macro lens on.
the school of future