Let The Beginning Of A New Year Mark A New Chapter Of Indian Economy

Country’s equity markets in the last couple of weeks seem to be behaving in an undecided pattern. It is moving up one day only to shred its gain next day thus being slimmer. This is despite one of the most awaited trigger of US Fed rate hike, now behind us. The market is imitating Parliament, which is also in no mood of moving anywhere forward in any front. The winter session of both the Houses of Parliament also got washed out just like earlier monsoon session. This is seriously hurting the development and growth of Indian economy.

The ruling parties in the shape of an alliance marking a change from earlier instances reached out the Opposition parties and tried to convince them for the smooth functioning of Parliament. However, their efforts remained futile in-front of an adamant Congress party and its allies. Finance Minister, Arun Jaitley even quoted a speech on the Parliamentary system by Pandit Jawaharlal Nehru to evoke response from Congress which also went unnoticed and many important bills remain as it is.

Jaitley even tried to subtly mention the money bill route like it is a convention in the United Kingdom. Interestingly, according to the convention, once a bill is passed in the Lower House of Parliament, the same can not be challenged and held back in the Upper House. But then the government might have faced strong criticisms by taking the money bill route for passing important bills like Goods and Services Tax Bill.  

GST Bill, passage of which can prove to be a game changer for the Indian economy and has the ability of pushing our economy to next orbit of growth has too remained in limbo due to not functioning of the Upper House. Investors in India as well in overseas destinations are eagerly waiting for the passage of the Bill. This will greatly help our nation to attract much required foreign investments. The recent comment by Mark Mobius, executive chairman of Templeton Emerging Markets Group in a media interview sums up the importance of the Bill. He said that “if the GST Bill does not get passed within the first few months of the coming calendar, it will be a very bad sign and we would not want to increase our India allocation. But if it is passed, then we would probably want to double our weight on India. So the GST is a very important issue going forward. It will give a signal to investors as to how sincere Modi and the politicians in India are to reform the economy.” 

Analysing the current seat count of Rajya Sabha, consent of Congress, which has 67 seats, a little lesser than 30 per cent of the entire seat count, is required for the passage of all the important bills. The dominant position of Congress in the Upper House will remain for at least two more years. By that time, ruling NDA will have only one year left of their current term. Therefore, it becomes the onus on the NDA government to try every trick in their book to bring the Opposition in the same boat. With all its strength they should try to persuade them for the proper functioning of Parliament. There is still around two months left for the budget session to commence. This window should be properly utilised to smoothen things. Even if GST cannot be implemented from the start of next financial year, it can always start from June or September 2016. Anecdotal evidence suggests that many state governments have already started administrative preparation for the implementation of the GST, what they are waiting for is final nod from Parliament.

This legislature reform will bring huge efficiency in the economy and may give rise to new sunrise sector that new opportunity to investors to identify and invest in multi-baggers.

Our cover story this time is on Midcaps. Those have remained a gold mine for profitable investments. Our earlier issue in the same topic has shown how investment in midcaps can make your portfolio outperform returns provided by any other asset class.  For example our midcap recommendation of year 2012 has given annual return of more than 100 per cent till now. This time too our story has ten recommendations along with the list of top 250 midcap companies.

Along with this, we are also carrying a special report on telecom sector. This sector has remained in the limelight for some time now due to the consolidation in the sector, call drop issue or introduction of new services by new and existing player. Our report talks about the impact of all these factors on the sector.

Hope this issue will help you to make a profitable investment decision. Please send you suggestion and feedback on comment@dsij.in.

Happy investing and  have a profitable new year eve!