"If one is to be called a
liar, one may as well make an effort to deserve the name."
—A. A. Milne (English, 1882-1956)
Word for the day
Landloper (n)
A wanderer, vagrant, or
adventurer.
(Source: Dictionary.com)
Malice towards
none
The amount of honking, indecent gestures and road rage - a disciplined
driver has to face on Delhi or Mumbai roads is sufficient evidence of growing
intolerance in the Indian society.
First random thought this morning
I find my teenage daughter
becoming increasingly intolerant these days. She would protest vehemently
against most trivial of the things.
Perturbed, I decided to
talk to her and straighten out the things. I was speechless, when she presented
her reasoning. She said, "I must protest to everything, trivial or
important, so that in future when I protest against something important, you
should not tell me that I had not protested against such and such thing a few
years back and hence I have no right to protest now."
"Protest today to
secure the right of protesting in future" - seems to be the mantra!
Beyond Bihar elections
Some readers have sought my views on economic and financial market
implications of the results of ongoing Bihar state assembly elections.
It has been my consistent view that Indian economy and therefore
financial markets are mostly neutral to the political parties and variety of
coalitions of such parties.
In fact the most euphoric periods in Indian equity markets
occurred during most politically instable periods. 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 Narsimha 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 (including JDU/RJD), full of internal contradictions and
inherently unsustainable.
Not incidentally, these were periods when many key economic
reforms were conceived and implemented to accelerate economic growth.
Therefore, assumption that any change in political equation post Bihar polls
would materially impact the primary trend of Indian economy or markets would be
unreasonable and without much basis.
Nonetheless there would be some short term implications of the
Bihar result the impact of which might be felt next week.
If NDA wins Bihar elections
(a) The market may move
higher due to covering of short positions created in anticipation of NDA loss.
Nifty may rebound to the recent high of 8330 in this scenario.
(b) The opposition parties
may adopt even more belligerent posturing in the winter session of the
Parliament, undermining the even slender chances of any breakthrough on key
economic legislations like GST. Wary of growing influence of BJP, the principal
parties in poll bound states of West Bengal (2016), Tamil Nadu and Uttar Pradesh (2017), may also take
aggressive position against the government proposals.
If Grand Alliance (GA) wins Bihar Elections
(a) The market may witness
fresh selling. However, the short covering at lower levels may limit any
dramatic fall in benchmark indices.
(b) The efforts to repeat
the Bihar GA experience in other states may accelerate. We may see some dissent
amongst NDA constituents. The opposition parties may adopt even more
belligerent posturing in the winter session of the Parliament.
(c) The government may
have to become more flexible in its approach to economic reforms and engage
more with opposition parties.
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