We accept the people’s mandate with humility.
I thank the people of Chhattisgarh, Madhya Pradesh and Rajasthan for giving us the opportunity to serve these states. The BJP Governments in these states worked tirelessly for the welfare of the people.
— @NarendraModi on twitter (After BJP lost to Congress in Chhattisgarh, MP & Rajasthan state elections)
While the Prime Minister has expressed humility and has mentioned the BJP’s intentions to strive harder for India’s development, is this really all that there is to the Great Indian Election story?
Maybe, this is just the beginning.
The week has had sweat dripping off D-street’s brows as RBI governor Urjit Patel stepped down under scandalous circumstances only to be immediately succeeded by Shaktikanta Das. Shaktikanta has been rumored to be a ‘Sarkaar ka Ladka’ especially after his extremely vocal support for the demonetization exercise.
Wrestle-Mania: The Elections, Government & RBI.
Amidst heavy election season, the Government appeared to pressurize RBI into releasing more money to the government which would help in populist measures like public spending to which RBI did not oblige. The RBI was merely trying to stand its ground as it has been striving to preserve long-term financial stability and such a handout would do more harm than good.
Apparently, the Government also asked the RBI to relax the PCA framework (a framework that put a tight leash on lending by incompetent banks). However, the RBI once again decided it would be detrimental to the Indian economy to pamper banks who should instead be given a better medicine to improve health.
However interestingly, while BJP lost grounds and the RBI governor resigned, markets continued to soar and rise higher every day last week.
Here are a few reasons which pushed the markets higher despite political uncertainty:
- New RBI governor meets PSU banks and indicates that an additional liquidity of INR 10,000 Crores would be injected through buyback of government securities and relaxation of the PCA framework could be on the table.
- CPI reports indicated record-low inflation of 2.33% for November 2018
- IIP report for October 2018 reported 11-month high industrial output at 8.1%
This just goes to show how fundamental development will always push wealth creation ahead, irrespective of intermittent events like elections.
Fund news:
- Essel Mutual Fund decides to change the fund manager of Essel Large Cap Equity Fund from Viral Berawala to Suraj Makhija with effect from December 04,2018.
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