All the business newspapers (links: Mint, Business Standard) are shagging over the Lehman Brothers report titled India: Everything to Play For. The report says that India’s GDP can grow at 10% a year for the next ten years, given the right reforms.
I’m about halfway through the report, and I have to say this: it’s awful.
The report reminds me of the draft Strategy term papers we submitted for the midterm review back in first year at IIMB. Our profs then abused each and every group for doing nothing but pulling in factoids and graphs from every analyst report we could lay our hands on, and not doing any analysis or linking of concepts of our own.
This report is very similar. The people who wrote it don’t seem to have met a factoid or a graph they don’t love. They’ve dumped in stuff from Pavan K Varma’s Being Indian, other stuff from the Tarapore Committee report, and even quoted a Hindustan Times real estate supplement. They have done some statistical analysis of their own, but that particular analysis seems to just float in space. It doesn’t serve as either a premise, or a conclusion or an intermediate step.
This has just gone on and on for seventy pages (I have a hundred more to get through). Each page contains a diagram or fact which is very interesting by itself, but there seems to be no actual analysis which shows how that fact or diagram supports the assertion made in the first chapter that the Indian economy can grow beyond 10% on a sustained basis.
There are also appalling non-sequiturs. Like the claim that the growth of the Indian telecom industry is illustrated by Nokia putting up its handset factory near Chennai in only five months. Completing a factory in five months can be taken as evidence of better construction techniques, or project management, or even the virtues of prefabricated sheds. But how does it demonstrate telecom growth? And why talk about Nokia’s factory when you could just show subscriber numbers (actually, they have shown those also. Which just increases my suspicion that they’ve thrown in every factoid they could find.)?
I suspect I’m particularly irritated by this report because I already know most of the factoids they’ve thrown in. Unlike the Percy Mistry report, there are no explosive new and big ideas. Hell, even Goldman Sachs’ BRICs report pointed out that India could push up its GDP growth rate by 2.5% over the existing rate with a set of five key reform measures (can’t recall the exact details now, might update the post with links later). This feeling will probably be shared by everyone who watches the Indian economy regularly. On the other hand, the CEOs and Heads of Strategy who aren’t familiar about the ‘India story’ and who get their fundaes on it from this report will probably go orgasmic over it.
A final point: The report is stored in a section of Lehman’s website called ‘Our Intellectual Capital’. Given how there’s so little original research and so many borrowed factoids in the report, Lehman’s intellectual capital seems to be more debt than equity. The investment banking strategy of high leverage seems to have spread over to their research divisions as well.