While the one year returns under Modi regime have just been 6%, since markets started pricing in the victory from January 2014 many argue it would make sense to gauge return performance since then. And since Jan 2014, the Sensex has returned a massive 32%!
While such outperformance is certainly noteworthy it may give an opportunity to Modi critics to hurl the cronyism bow at him. Mind you the opposition continues to label the government as crony with utter disregard for farmers. But what is the truth? Is the government really ignorant towards the needs of poor and is business centric?
Well, there is no sure way to know this, certain steps taken by the new government show that it is keen to display it does not favour industrial groups at the cost of common man. Take the case of Reliance Industries for example where increasing gas price has been a contentious issue for long. Though the Rangarajan committee's formula yielded a figure of US$8.4 per unit the Modi government is allowing only US$5-5.5 per unit to be charged putting RIL at a disadvantage. This is not a one of case. Modi's strategy to distance himself from the Adani's Australian coal block project loan imbroglio with SBI is another example indicating that the government does not want to fall into corporate lobbying. Even the general sentiment is that influence from New Delhi cannot be bought anymore.
While this does not mean that Modi government is pious and incorruptible, it is taking steps to project itself as being indifferent to corporates and common man. We reckon this is the best strategy to survive in politics as you are dependent on former for funding and latter for votes! Apart from sloganeering and marketing, diplomacy is another thing at which the new government is certainly good at.
While such outperformance is certainly noteworthy it may give an opportunity to Modi critics to hurl the cronyism bow at him. Mind you the opposition continues to label the government as crony with utter disregard for farmers. But what is the truth? Is the government really ignorant towards the needs of poor and is business centric?
Well, there is no sure way to know this, certain steps taken by the new government show that it is keen to display it does not favour industrial groups at the cost of common man. Take the case of Reliance Industries for example where increasing gas price has been a contentious issue for long. Though the Rangarajan committee's formula yielded a figure of US$8.4 per unit the Modi government is allowing only US$5-5.5 per unit to be charged putting RIL at a disadvantage. This is not a one of case. Modi's strategy to distance himself from the Adani's Australian coal block project loan imbroglio with SBI is another example indicating that the government does not want to fall into corporate lobbying. Even the general sentiment is that influence from New Delhi cannot be bought anymore.
While this does not mean that Modi government is pious and incorruptible, it is taking steps to project itself as being indifferent to corporates and common man. We reckon this is the best strategy to survive in politics as you are dependent on former for funding and latter for votes! Apart from sloganeering and marketing, diplomacy is another thing at which the new government is certainly good at.
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