After market craziness, it's business as usual
Free Press Journal [
Mumbai
]
Jun 8, 2024 | Page No.: 22 | Position: Top Center | Source: Madan Sabnavis | Sq Cm: 427 | AVE: 339458 | PR Value: 1697290
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After market craziness it s business as usual and this is how the market works The economy may be expected to 1°11 On Wednesday June 5 which is go along the existing path of high one session after the election re- growth with the government pro- sults were out the Sensex recov- viding support through enabling Spectrum ered to end at 74 382 which is still policies Hence measures to up in- higher than the May 31 closing dustrial and exports growth would Madan Sabnavis What is one to make of this mad- be something that would be expect- ness In short the market still be- ed as they remain the weak links in lieves that the economy is on the the growth story On social welfare The markets surely were right path with the coalition gov- there would be some bit of intro- crazy this week The Sensex ernment in place and hence has re- spection as there may be need to closed on May 31 which was posed faith The fall on the 4th was address specific concerns of some also the day that the GDP growth a knee-jerk reaction The continua- of the stakeholders But this can be numbers were released at 73 961 tion of the era means that things subsumed in the available space The release came out after the mar- will be business as usual The poli- provided by the fortuitous higher kets had closed On Saturday as the cy framework will remain more or transfer of RBI surpluses to the fmal round of polling was complet- less the same and while there can government ed various agencies had their exit be some tweaks to accommodate From the point of view of the polls which showed a clear majori- the coalition partners the struc- market it should be back to nor- ty for the BJP party and even high- ture will remain unchanged mal There will continue to be er for the NDA Naturally the mar- What will be watched from here some volatility until the new gov- kets were enthused that the exit on by investors will relate more to The economy may be expected to go along the existing ernment is sworn in as markets polls gave very positive signs for the finances because the fiscal factor in all possibilities until the the future of the economy and the deficit is the most singular indica- path of high growth with the government providing final decision is taken The content Sensex increased to a high of 76 468 tor of the health of the finances of support through enabling policies Measures to up of the budget will be important on Monday This spooked expecta- the country Therefore the glide here as that will be scrutinised in tions that there were even greater path to the short-term goal of 4 5 industrial and exports growth would be something that some detail to gauge the strength things in store However the party of GDP by FY26 is one area that would be expected of the resolve of the coalition gov- was spoilt on Tuesday when the will be monitored Here there is lit- ernment The rest will be driven by election results were declared The tle reason to be sceptical as the gov- the corporate performance as it NDA had the majority which the ernment has guided the deficit in in the digital space as well as capex and hence there is little reason to would also be the time when the BJP didn t and the Sensex ended difficult times Now that growth is by the government Both have had conclude that there could be any first quarter results would be out lower at 72 079 The notional gains expected to be on the path of up- strong backward linkages with the impediment along the way There and a better picture of the and losses in market capitalisation wards of 7 in the next few years related sectors thus providing a fil- are touchy issues like labour land monsoon would emerge Foreign were calculated and the picture there is unlikely to be any external lip to the economy at a time when and agricultural reforms which investors however will continuous- was nothing short of being dra- pressure on the deficit As long as the private sector has been slow to have not been addressed even in ly monitor what happens in the matic on both the days growth is in the range of 7-8 this invest The budget to be presented the past and hence would not be corridors of power while looking Markets are driven by irrational year with inflation under control at in July will provide direction here ones that would take the govern- out for all messages that come from exuberance There was no reason less than 5 there is reason to be- The amount allocated in the inter- ment by surprise These are works the government on reforms Hence for the increase of almost 4 on lieve that there will be revenue slip- im budget is fairly high at Rs 11 in progress where a consultative articulation will be very important Monday After all the ruling gov- pages GST collections for the first lakh crore which would have to be approach is called for especially on the policy front to reassure in- ernment was expected to come two month appear to be on the largely spent in nine months time when it comes to the farm laws vestors when a coalition govern- back to power and the only conjec- right path giving confidence to this Therefore it does not appear to be However this is something the gov- ment is in power ture was the number of seats Sim- belief a tricky situation on account of the ernment should take up as the ilarly when the coalition got the The other related area would be coalition government farm sector is the only one which The author is Chief Economist Bank of majority the fact that the leading capex of the government The The coalition partners at their re- has not witnessed any reforms in Baroda and author of Corporate party didn t should not have shak- biggest victory over the last 10 spective regional level have been terms of improving productivity Quirks The Darker Side of the Sun en the market But both happened years has been the progress made progressive in terms of reforms or marketing Views are personal