"The worst thing about
some men is that when they are not drunk they are sober."
— W. B. Yeats (Irish,
1865-1939)
Word for the day
Passel (n)
A group or lot of
indeterminate number, e.g., a passel of dignitaries.
Malice towards none
Is Mahishasur more relevant
than the anarchy in Haryana!
Why no one is seeking a
debate in the Parliament over Haryana massacre?
First random thought this morning
The government has given a firm reply to the allegation of crony
capitalism, by hitting the alleged friends of PM hard in the budget. The hit was
so hard that even communist Sitaram Yechury was seen sympathizing with
corporate India. Congress too could not find anything material to criticize in
the budget. Frivolity is what we shall see in the days to come.
The morning after
The morning after market woke up fresh and excited. There was no
feeling of tiredness or nausea. The cynics tried hard but could find virtually
nothing substantial to criticize in the budget. The bench sitters jumped in the
arena and shorts were scurrying for the cover.
It would be wrong to say that the market is completely out the
woods. The high intraday volatility continues to be high. The volumes are
nothing commensurate with the level of activity. Implied volatility continues
to be low to moderate. The momentum is clearly weak on the daily charts.
But it could be said with reasonable degree of certainty that a
strong bottom is forming in the 7000+3% nifty range.
I highlighted the first and hurried impression about the budget on
Monday night. After careful study, I am even more convinced that the budget is
very close to the best that could have been done under the circumstances.
The following points, I found missing from the common discussions.
(a) The budget speech
avoided many key terms like "Smart Cities", "Defence",
"Minorities", and "GST". If read this with the Railway
Budget, which avoided reference to passenger and freight tariffs, it is that
the government increasingly shifting the focus to the Executive action. Since
independence governments have been taking parliamentary approval for raising
charges of platform tickets, post cards etc. Taking these, and many bigger, things
out of legislative domain is a key reform that is being silently implemented.
(b) The budget also did not
mention new AIIMS, IIMs, IITs. The entire speech did not name any region,
caste, community or gender. The rural sector allocation did not rise much, but
within that non-MNREGA allocation saw 94% jump. Inclusion, productivity and
faster execution appears to be the focus. Announcing projects just for
foundation stone laying ceremonies is past.
(c) Promoting NPS at the
expense of EPFO, and retaining MF dividend out of 10% dividend tax, are
extremely positive long term measures for the capital market. NPS could become
a viable alternative to FPIs. It will get 25-35year money to invest in markets.
Given the social security gap in the country, it could become much bigger than
LIC and EPFO in next couple of decades.
(d) In a rare instance, FM
has budget much lower growth in Excise (12%) and Service Tax (10%), and much
higher growth in income tax (18%). Inflation targeting seems to have rubbed off
on North block mandarins also.
(e) Strategic oil reserve
could soon become a reality, at the expense of foreign vendors. Similarly, food
processing industry may also get a boost at the expense of global retail
chains.
(f) New sections 54EE and
54GB imply -sell your house and invest in business if need be.
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