Democracy in Shambles - Needs Revival across Nations

We all have now witnessed the infamous Turkish Parliament brawl, one parliamentarian punching the other, shouting, screaming, abuses and what not & these are the legislators who have the powers to make, amend or break the laws for the benefit of the masses in general. Ask any Indian, were the scenes of Turkey Parliament brawl amazes them? Answer would be NO. Its a deja vu for many as we have seen our legislators doing what not in parliament. But this piece is not about comparing the acts of one parliament with another, this is more about Democracy and the progressive nature  this style of ruling boasts about. Is it really reeling benefits for nations across globe?

No doubt that every one in Democracy has the right to speech, freedom of expression and various other freedoms which none autocratic nation would enjoy but when it comes to administration - Democracy is not so fulfilling for many. You have the right to select your leaders but democracy limits the execution. In India, we have been hearing about the implementation of GST (one of many enactments)for a decade now, Modi-led government has completed 2 years now but has we witnessed the universally levied tax coming to fore? We might have few acts passed in Lok Sabha but Rajya Sabha (upper house) holds the enactments (blame the minority which the ruling government has). Administrative powers of Democracy if needs to be clipped or ratified should be done. If Pro-Democracy means snarls, delays or indecisiveness then I don't think we are enjoying our Democracy.

People are questioning the odds of Donald Trump becoming the President of The USA and are also questioning the choices which the people of US are making. I believe and has full faith on the choices which the people would make but if this freedom of choice leads them to an arena of indecisiveness then they would also question their judgement.

Also, if we are blessed with Democracy then repeated pronouncements of being able to choose what one wants and what one chooses to be, is not the only pro-factor of democracy but execution of choices, enactments of fundamentally beneficial acts and progressive approach towards mass benefits is what justice, equality, freedom and being republic is all about.

Legislators should have the onus to perform and enunciate the benefits of democracy but acts of hooliganism and disorder creates an irreparable mental void for the masses and it might take decades before one starts trusting the law and legislators again.

Please Mind the Gap/Void!! 

Trump or Hillary- What's in it for India?

People who are following the next big event which would have a global impact - selection of President of The USA (POTUS) 2016 would be keeping a close eye on the nearing finalisation of nomination of Donald trump and Hillary Clinton for the race to become the face of USA.

Lots of hue and cry, blame games are on, mud slinging and tantrums coupled with unprecedented comments and visuals are becoming the part of the mega campaigns. Worldwide people are guessing and creating an opinion on who and how would impact them. Who should be the right candidate and what changes would her or his selection mean to them.

India who would surpass China in the GDP % growth in couple of years as predicted by global financial bodies and are putting their bets on India to catapult the global growth rate, has lots of expectations from this campaign. From an IT perspective our global footprint is expanding and our resources are being given opportunities on foreign soils, can this get hit? Outsourcing issues are at the helm. US's Shale gas discovery and its unprecedented event to export the crude has crudely hit the market in terms of its value (rock bottomed)today. How will US deal with anti global terrorism acts of ISIS? Will India be benefited out of this? An extremely important question on how will we have to deal with terrorists and their lethal activities across globe. Foreign policy on US's association with Russia, Israel, North Korea and China is still not completely answered by any of the prospects.

Trump's mockery of Indian accent which has been an act of deliberations and arguments should not be judged on the way his final strategy would be framed upon. One must understand that there is a huge difference when one campaigns and when one gets elected. His harsh and critical remarks would only get subdued if he would ever get accommodated in Washington DC. On the other hand Hillary Clinton has not made any stark remarks on her foreign policy structures, she is still measuring each and every statement to its best without clarifying her thoughts and leaving the audience guessing. That's her style and one should respect that. Rallying on women power is something she enjoys and has command on but it's too quick to say anything now.

However, as of now I believe the race is still long way to go and would give each candidate a 50-50 chance of steering the way ahead. But yes, too radical and too irrational remarks would not help Donald for a long time. Mind the GAPS!! 

Indifferent about “Nationalism” deception..

It’s been months now that in some or the other way an anti-nationalist or nationalist specific agenda has overpowered the prime time news bits and grabbed the headlines of various newspapers, journals and periodicals. Jibes by one party worker and counters by others, stalling the Parliament’s functioning, rethinking about our Constitutions’ fundamentals and its validity today and religious/caste/creed based issues are most widely discussed in forums, conclaves and confederations. Does our populations’ majority ruled middle class is actually concerned about these debates and their validity? Do these issues have any fundamental effect on their lives? Mere topics which are much talked about during their free time tea rounds with friends and families. That's it!!

 We are actually indifferent about such issues, believe it or not. Then what actually is important, what matters to us and what these political establishments should discuss to become relevant. Simple and the answer is known to all but it’s the lack of intent which is the major problem. Survival of a 5 year term with more of discussions on these sensitive cum invalid discussions and no elementary work on ground is the way a government finishes its term. And if a regulator shows any intent then opposition halts every ounce of efforts displayed by the legislature.

We are only concerned about development, upliftment of infrstructure agenda, bringing people above poverty line and making mass employment opportunities. Do we hear about such agendas on a daily basis? We would have a broad grin and laugh off. Whether you are tolerant enough or intolerant to issues, basic survival necessities is what a person needs and direly awaits for. Till the basic survival amenities are not fulfilled, these anti-national or national agendas are just discussion points. They stand no relevance for major section of our society. That is the reality and it’s relevant. Hope the political parties take a note and just not work for another term but a decade of relevance for masses.

When our dirty & Ill - timed Internal politics supersedes the External economic push!

Brent Crude trading at ~ $36/barrel and West Texas Intermediate at sub $35/barrel, these prices are so encouraging for country like India which imports more than 70% of its energy needs that multi-year floored crude prices would directly give the economy a great impetus. A push that would be so needed to raise our growth trajectory in 8 - 9% range. A range of growth which is achievable with little help from our internal political parties' consents. One of the reform which would steal the lime light would be the passage of GST. A standardized tax applicable on all goods and services. We have a structure ready with deliberations on. But if these deliberations are held in a manner that it blocks the logical flow of action then it's appalling. GST's implementation is doing the rounds for quiet sometime now and when finally it seems happening and the act getting enacted and formulated with all nitty gritties being discussed, National Herald happened.

When the government wanted GST so badly to make the "Make in India" campaign successful and other schemes launched by our ambitious PM a story to remember, this revelation of National Herald (NH) Scam was badly timed. Understand this, the scam has already happened, facts and figures are known, the alleged convicts are known and they are here to stay and you can get hold of them yet again but revelation in the beginning of the winter session was really pathetically timed. Why timing is critical because we have yet again lost a complete session of our Parliament which was so needed because of this NH Scam revelation.

GST lost to NH Scam. We are left with 3 working days of winter session and other amendments, enactments and policies are lined up, lets see how can the government push for the same. Gandhis were summoned on 19th Dec, if they were summoned on 9th January, 2016 what could have changed? Atleast we could have saved our winter session of parliament. When the government knew that anything but GST is so desired they should have played smart.

Anyways, in BJP vs Cong tussle the economy was punished and hence, we are loosing at least 4-6 months of time before we get the desired and much needed reforms to get tabled and discussed. One should realize that the external economic factors are not in anyone's hand, hence, to get their act together it is important to be prudent and get the maximum out of the external factors. With USA now in line to start exporting its Crude oil after four decades, India might again be reaping benefits in the coming months.

Timing and Prudence are very critical factors that the Government should now take a note of, else we would yet again miss a growth propelling decade.

Devaluation war - A 'Never Before Chance' to amend Reform Trajectory

With gigantic pressure on Chinese counterparts to make their economy (export driven) look more robust and attractive, a plunge of more than 3% vis a vis US $ (1.9% -  Chinese govts' push and remainder is markets' reaction) has taken the global economies and policy makers by surprise.

Where on one side US Fed's rate hike was a talk of town, suddenly we have another mega event which has been doing some rounds now across global markets, and that is the "Currency War" which may get trickle down to a situation where economies challenge each others currencies' devaluation for no good. But what happens now? What should India do now? And, why is this a 'Never Before Chance' for a country like India?

With a massive demographic advantage and with lots of push by the GOI (Govt. of India) to enable the Small and Medium enterprises to become a viable business proposition, focussing on this segment more would be of ultra importance. Just launching of schemes and formation of institutes like MUDRA would not make a massive difference but hand holding these small entrepreneurs will. India as an economy would get a much required impetus to touch that 8-10% GDP growth target YOY if and only if we can incubate these small ideas. A logjam in our Parliament would only add insult to injury. Scumming to opposition's' tactics would only drag our last chance to be a responsible superpower on this globe.

Inflation; both Wholesale and Consumer Price Index are under control, crude is dripping below its lowest lows in past few weeks and being a mega importer of energy we are in a comfortable Current and Fiscal deficit conditions, hence, waging a currency war with other global currencies would not be feasible option for India. It would increase our fuel bill and dent out low deficits. Putting us in a catch 22 situation. This situation demands a more focussed domestic approach. Push GST, break the democratically hurting logjam, consensus on Land Acquisition Bill and capping the NPAs is the way we should focus more on.

Chinese government's' acts /US Fed's rate hike/ drag in commodities prices can dent us and impact our economy a bit but to keep the adrenalin running we need to have a stable domestic economy and reforms' agenda running without any man-made disasters(Parliament Logjam). Investors know where to put their money (India is still the most preferred destination among the other BRICS nations) but being responsible is the call of an hour. 

Volatility - An unsustainable Goliath

Last financial year, be it from a January - December period or April - March period, was a year with great returns for investors in bourses across the globe. Indices across globe gave returns of around 15 - 40 % on an average, the best performing asset class for the investors. Metals lost sheen, crude starting plummeting ( Short Bets though minted a lot but took brokers by surprise initially) but bourses were the best return reapers for the brokers/investors.

Though it seems like that bourses would yet again be the best return minting instrument but the imbibed volatility of indices makes it really tricky for a retail investor to track the markets. Algorithmic trading with massive bets makes it really intriguing for the retail investors to gauge the momentum and that is where they burn their fingers. I dont have the precise numbers right now with Retail investors'/FII's or DII's gain/loss percentage, but the implied volatility has kept the small and brittle investors on their toes.

This year with Greece's oust almost inevitable, until a dramatic treaty is signed with the creditors in couple of weeks, US Fed's unavoidable interest rate hike lined up in 2-4 months, China's stability concerns, Yemen's stability and crude's supply concerns and domestic economy's reliance on global trade, it is said to be a year of big bang Volatilities.

In India, the upcoming monsoon's 8-10% deficit prediction would be of a big worry as well. Where on one hand, the effects of Modi's 1 year regime is still not visible on the ground, unsustained nature's bait (unseasonal rains and recent earthquake's destruction) would add on to the already volatile markets.

This year without knowing where the markets would actually move, one thing is for sure that the movements would be massive and would be unsustainable for atleast the retail investors.

BUDGET 2015-16 – A mere display of Intent or enroute to Fiscal Solidarity?

A fortnight after the Budget 2015-16 was read out by the Finance Minister, it can be described as a budget with an enormous display of intent. A Budget that guides what the Indian Economy should achieve but the concrete plan to reach that level is still imaginary (relying on the numbers presented is debatable).

Restricting Fiscal deficit numbers at 3.9% of GDP for 2015-16 and total stake sale in the Public Sector Enterprises at more than INR 69,000 Crores is envisaged through disinvestment. With this fiscal year’s revised target is brought down significantly, reaching an ambitious plan for 2015-16 is questionable.

Reduction in corporate Taxes from 30% to 25% in the coming four fiscal years is a booster for the Private enterprises, this would lead them to invest more in infrastructure and creating capital for future needs. Also there are exemptions being removed, but we need to wait for sometime before we get clarity on the same.

Different governments come with different schemes and the previously established schemes with same objective but with different names get oblivion. An example below of an editorial says all:

“It announces grand new schemes even as others in the same area that were announced just last year are yet to see the light of the day. So we are to have a new Micro Units Development and Refinance Agency Bank, with a corpus of Rs 20,000 crore, but the Rs 10,000 crore entrepreneurship fund for the same sector that the finance minister announced in his first budget is nowhere to be seen.” – EPW Editorial from 7^th March, 2015 publication.

The integrity of the numbers presented in the Budget is always under scanner. Finance Minister believes that our country can grow at 8% of GDP in next couple of years, I don’t think that can it be a reality with a stalled Upper House? Can it be possible with an Ordinance route taken up by the Government? Is it achievable when our PSBs need ~INR1.6 Lakh Crores for capitalization to meet the Basel III standards? You can pose many other questions but the fact of the matter is, it’s imperative to be practical. Through sentiments and intent display an economy cannot grow. The first visible change on the ground is raising the cap of FDI in insurance from 26% to 49%. There is nothing concrete except it. You can ask me to be more patient and give the government some more time but with Land Acquisition Bill stalled and all the chaos around it, I can only be hopeful.

Also, hopeful on the integrity of the fiscal deficit number’s achievement and the disinvestment target’s ambitious numbers. Let’s see where the contours of this Budget lead us to.