When you know what govt will do next, you know where to bet

By DK AggarwalThe wait is over. The Modi-led NDA government’s return to power at the Centre signals that India needs a strong leader who can deliver political stability and economic development; local in roots, global in vision.Good politics is all about good economics: one needs to closely watch Modinomics and Modi-fications. We hope RBI will be more accommodative in June.In the first term, Modinomics focused on some key deliverables – AMRUT, HRIDAY, Bharatmala Pariyojana, UDAY, UJJWALA YOJANA, Smart City, Ease of Doing Business (EODB), GST implementation, introduction of bankruptcy code and Make in India, to name a few. And, India marched on the path of digital transactions at a faster pace.With renewed vigour, now the immediate task in the hands of the Modi government will be to focus on governance and the growth slowdown in the economy, which slipped to 6.6 per cent in the third quarter of 2018-19, so that it does not become more pronounced. The government should focus more on financial inclusion, spending on infrastructure development, fiscal consolidation, smoothening and simplifying earlier reforms such as GST, RERA and BFSI reforms, improving direct and indirect tax collections to provide relief to the farm sector, reviving industrial growth, increasing credit growth, and most importantly, Job creation.After the recent bankruptcies in the airline and telecom sectors, the government’s focus should be to uplift these sectors along with others such as NBFC and automobile. Consumption demand has been slowing continuously and the government should focus on boosting demand by creating jobs. For this, the government has to double its efforts under the ‘Make in India’ programme. Only by pursuing policies that can ensure genuine product development and manufacturing within the country can the government make the ‘Make in India’ programme a grand success and address joblessness, which continues to be a thorn in the flesh of the economy.India’s GDP needs to grow faster than even 7 per cent. Going forward, macroeconomic stability will guide India on a high growth trajectory. The government has to bring petro-products within the ambit of GST and that would be the one of most effective measures to put the economy back on track.With the return of the Modi government for next five years, the focus of the stock market would be on the growth cycle. From here on, investors should look at companies that are expected to be in the limelight over the next three to four years based on expected policy changes. The full-fledged Budget, due in July is likely to give a new direction to the economy and pave the way for foreign fund inflows to continue. 69493939 Chairman & Managing Director,SMC Investments and Advisors Limited

from Economic Times http://bit.ly/2EtpAZi