Posted on 8 January 2015 by Douglas ChadwickThroughout last year there was much talk about the potential for the Indian stock-market to make sizeable gains under the tutorship of its new Prime Minister Nerendra Modi. He was seen as a new broom that would sweep away corruption, archaic labour laws and enormously restrictive land development laws. In particular he targeted the growth of manufacturing industry as the means of bringing employment to a young educated population. The problem in acquiring land for industrial development and new infrastructure projects is one of history. The land owned by families has historically been broken up on the death of the owner and split up between the offspring. This has meant that the parcels of land have over time got smaller and smaller with an exponential growth in the number of landowners. Negotiating for land to develop large projects has therefore become almost impossible due to all the compensation claims. Mittal, the world`s largest steel-maker was forced to ditch the construction of a huge mill. Tata Motors also walked away from putting down a car manufacturing plant. It is reported that at the present time there is over $280billion of industrial development being held up. Last week, unable to get the laws changed through the normal parliamentary routes, Modi and his cabinet broke the deadlock by the issue of an executive order. This order reduced the compensation due to displaced landowners and removed the necessity for an 80% approval before a project could be approved. It is thought that although this may be a vote loser with the land owning population, it will open the door for industrial and infrastructure projects such as the building of many new cities. This in turn will create many hundreds of thousands of new jobs and a corresponding lift in the country`s tax revenues. Nerendra Modi has a good working relationship with the Japanese Premier Shinzo Abe. Working together there is an outlet for the excess Japanese Quantitive Easing money to be directed into financing these Indian infrastructure projects. There is already a major rail project which will revolutionise the movement of freight around the Indian subcontinent. This is being financed by the Japanese banks. Modi has also introduced Japanese people into his cabinet to smooth out this working relationship. What is there not to like about all of the above? It would be nice to see this approach being used in the European Union. In Brussels they still have to realise that the problem with socialism is that you eventually run out of other peoples` money. But that is a digression. Back to whether the Indian stock-market funds would be a good place for some of your future investment money. Look at the graph below which shows the last twelve months performance for the three Indian funds...Neptune India...Jupiter India...First State India Subcontinent. It shows a beautiful 50% annual growth for all three funds with relatively little volatility in the upward trend. I cannot think why this trend would alter with Modi in charge and pushing for yet more pro-business changes to the law. These funds feature in the Saltydog portfolios.