Believing in India

When foreign brokerage firms evaluate Indian markets and comment on political climate, it is taken seriously. Because it is election time. One of the electioneering contestants was boosted while predicting investor sentiment without having true vision of the political set up in India. The state which has many industries has given many tax exceptions to industrialists, not all of India is like this. A contestant from that state is expected to become the next leader, and that cannot be predicted. We have a weak unstable government which has resulted in creating a judiciary which is now making laws. We also have a highly reactive media which causes panic among citizens. The people have lost all confidence and are just not interested in investing in the industries.And investor reaction drives markets. Sluggish markets mean slow growth. Corporates have been an agent of change. Corporates never down-grade themselves, the growth has been 4.4% in the first quarter of this year. That is a positive sign, as we are coming out of the slow-down.
Since, we have been upgraded by opinion of foreign brokerage firms, and that is a positive comment which would further boost investment in India. FDI (Foreign Direct Investment) has increased by 35% Services sector has contributed more than the manufacturing sector. We cannot think backwards, we cannot change policies by going back in time. We can only think forward. What matters is the kind of policy we would adopt after the elections(five states are going to the polls right now) There are limits to what the government can do. Can the government control prices of commodities? No. The markets control prices. If the different parties elected form a club and try to think it out, it may work. Or if a small party comes to power, and it takes the advice of the best minds, it will work out also.
What will help is a climate where uncertainty is removed, fear psychosis is removed. Then, investor confidence will increase tremendously. The Indians outside India would invest in India, taking advantage of tax reductions. The world has confidence on Indians, for we are the best.Let us believe in ourselves.