What happened?
Government came out with good economic survey report on June 2 which raised hopes of investors on budget. But FM came out with 100% social budget and dashed the hopes of investors. Government came to power on the strength of social measures like farm loan waiver and NREGA. Government is facing elections in 2 crucial states (Maharashtra and West Bengal). While Congress wants to go alone in Maharashtra, it is an opportunity after 35 years in West Bengal.
Budget is a significant event and gives a serious brand image to Government. So, Government decided to get “Pro-poor brand” ahead of crucial state elections and announced a slew of social measures. It will continue to announce similar budgets for next 4 years. UPA Government achieved what it wanted (this Government is there for poor) by announcing social budget.
In mean time, Congress Party and Manmohan Singh don’t want to miss this opportunity to take India to new level. It will continue to do reforms in back ground for the next 5 years while looking as a social government by announcing pro-poor budgets.
Frankly, reforms like stake sales are necessary to run this Government otherwise, fiscal deficit will explode to 12-14% levels in 2 years (both central and state combined). Bond yields will rise to out of control levels. India’s credit rating will be downgraded to “Junk status”. By that time, interest rates start to move upwards and inflation will start to give troubles. PM and FM knew all this but they are planning to raise money in a slow and silent manner.
Click here to read article on investment opportunities in select PSU Companies.
How to pay Subscription fee: http://www.stockmarketguide.in/2009/05/how-to-pay-subscription-fee.html
What are subscription fees: http://www.stockmarketguide.in/2009/05/subscription-fee.html
Mail to dr.nvkrishna@gmail.com if you want 1-day trial subscription.
0 comments:
Post a Comment