Thought for the day
“The schools would fail through their silence, the Church
through its forgiveness, and the home through the denial and silence of the
parents. The new generation has to hear what the older generation refuses to
tell it.”
-
Simon Wiesenthal (Austrian, 1908-2005)
Word for the day
Elegy (n)
A sad or mournful musical composition; especially a funeral
song.
(Source: Dictionary.com)
Teaser for the day
Once out of denial – the Congress Party will be most
relieved. It is the only party that can do better than expectations.
Third fronts have mostly been good for economy
A government without
Congress or BJP post 2014 is less likely in my view. However, for the argument
sake even we take a hypothetical situation where non-aligned regional parties
like JDU/RJD, TMC/CPM, BJD, DMK/AIDMK, SP/BSP, TRS/TDP, etc. get sufficient
seats to form a government along with Congress joining or supporting from
outside.
The moot question is should investors be worried about this
probability?
I had expressed my opinion on this many times in past. I am
happy to reiterate.
In my view the investors should rather be happy with the
prospects of a larger number of regional parties with different socio-economic
ideologies sharing power at center.
I find that post independence the best periods for the Indian
economy have perhaps been those when a “coalition” government was in power.
By “coalition” I do not mean multi party governments. In my
view, coalition government means where people with different and many a time
completely diverging socio-economic policies jointly participate in a
government. They arrive at the common minimum agenda of agreement and focus on
executing the same, hence avoiding conflicts and logjams.
The first cabinet of India post independence had R. K.
Shanmukham Shetty (Finance), Shyama Prasad Mukherjee (Industries) B. R.
Ambedkar (Law) and Jagjiwan Ram (Labor). These people did not subscribe to the
Nehruvian socio-economic agenda, but we still got a robust socio-economic framework.
The singular governments of Nehru (post BRA, RML, SPM - 1956 and 1961), Indira
Gandhi (1971, 1980), Rajeev Gandhi (1984) are not particularly known for good
governance or socio-economic reforms.
Morarji Desai (1977, FM H. M. Patel, Bureaucrat – FERA dilution,
Gandhian socialism, Mandal Commission), V. P. Singh (1989, FM Madhu Dandavate,
Socialist – tax reforms, social
justice), Chandrasekhar (1990, FM Yashwant Sinha, Bureaucrat, fiscal
commitment, government exiting non-strategic businesses) PV Narsingh Rao (1991,
FM Manmohan Singh, Economist – economic liberalization, Industrial delicensing,
LERMS, financial sector reforms), Devegoda/I. K. Gujaral (1996, FM P.
Chidambaram, Lawyer turned politician – dream budget, tax reforms), Vajpayee
(1998, 1999, FM Yashwant Sinha, Jaswant SIngh – divestment of government
monopolies like roads, power, coal, NELP, NHDP, SEZ, nuclear program) and
Manmohan Singh (2004, FM P. CHidambaram – RTI, MNREGA) were all coalition
governments supported by socialists/communists.
These governments are all remembered for some structural
socio-economic reforms causing fundamental positive changes in the economy.
None of these governments is particularly remembered for
non-governance, anti market policies or anti business stance.
I will therefore be not too
worried if our base case of Modi led NDA government does not materializes.
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