"Then not only an old man, but also a drunkard, becomes a second
time a child."
—Plato (Greek, 427-347BC)
Word
for the day
Genuflect (v)
To express a servile attitude.
Malice
towards none
Hurricane RaGa has now been
downgraded from level 5 to level 0.
First random
thought this morning
We have adopted a lot many
things from the Europe and US in past one century - ranging from constitution,
administration practices, language, food, fashion, TV shows, technology,
education system, legal system, architecture, system of medicine, accounting
practices, taxation practices, profligacy, violence, and intolerance to music,
art, movie plots etc.
Many of these imports violate
the conventional concept of Indianness, and many have since been abandoned by
the originators themselves.
Our exports to the western
cultures include yoga, spirituality, classical dance & music, food,
tolerance, non violence, frugality, and altruism.
This trade deficit is
blunderous, just like the proverbial gorilla in the room that no one is talking
about.
Can't stop an idea whose time has come
Pursuant to my request yesterday (see
here), I have received a number of suggestions as to the topics I should be
delving upon while formulating my investment strategy for next year or so.
Not surprisingly, most of the people want to know my views on the
likely impact of 'Demonetization', 'GST', and 'Trumponomics' on the investment
strategy of an Indian investor. Some have asked for stocks ideas to implement
the changes in the strategy.
I would like to make it very clear, that in my firm opinion, all
these ideas are popular today just because their time has come and not for any
other reason. These are culmination of a long drawn process involving a number
of socio-economic and political changes. Most investment strategies in fact are
already oriented to assume the full implementation of these events.
Any businessman in India would tell you that ever since global
financial crisis of 2008-09 (GFC) there has been a concerted effort on part of
the government, enforcement agencies and regulators to check money laundering
and accumulation of black money. Holding large sum of cash had become seriously
difficult for past many years.
In last 3-4years particularly, a number of steps have been taken
to curb generation of black money. Fraudulent agriculture income (e.g.,
Himachal CM Birbhadra Singh); fraudulent real estate deals (e.g., Robert Vadra
deals) and regulation of real estate sector; Hawala deals (HSBC Swiss account
disclosures, taxation of Vodafone deal, revision of Mauritius and Cyprus
treaties; transparency in Defense and Railway purchases; regulation of bullion
transactions through TDS and excise duty; AIR for transactions exceeding
Rs10lacs; information sharing deals with foreign regulators; curbing of money
laundering through fraudulent long term capital gain in penny stocks; FATCA
disclosures; etc. are just a few of the steps taken to achieve the objective.
Abolition of high denomination currency notes is certainly a step
with widest possible repercussions. But it is in no way the first or the last
step in the process. It is a step whose time has just come.
After living with a fractured political mandate for most part of
last three decades, we had been consistently witnessing clear and full mandates
for past few years. BJP as a political party is ruling in over half the
country, and this is what makes it the most appropriate time to implement GST.
The economy is definitely headed towards a more organized and
structured business environment in the coming decade or so. The businesses
mostly based on tax arbitrage (or evasion) opportunities and non-compliance are
going to get extinct in next one decade. That has been my strategy for past
couple of years and would continue to be so.
Insofar as Trumponomics is concerned, I believe people are bored from eight
of status quo and want a change. They have got the change and are obviously
excited. I am too naive to judge the impact on global economics and politics
just as now. But the itch to make a guess is certainly there....more next week.
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