With the markets down this week, the budget euphoria fading out, and people being seemingly unfazed by Drake’s recent “drop”, the universe decided to end the week with some drama - a classic “tu tu Main Main” episode between our country’s politicians as we inch closer to the elections.
What Happened?
The National Democratic Alliance (led by the BJP) marked almost a decade of being in power and launched a White Paper stating how amazing they are, and how the United Progressive Alliance (led by the INC) did a terrible job in their decade of power before
To counteract this, the UPA simultaneously launched a Black Paper saying that the NDA made promises that it didn’t keep and has actually made the nation’s situation worse!
In what seems like a pointless charade fuelled by political agenda alone, the clash of clans has resulted in a lot of confusion as to what these documents mean, which is where we come in:
While this is an extremely concise version of both papers, being almost 60 pages each, it does give us a gist of the theme around which the papers hover, signalling one thing as usual - an attempt to stir up voters on both ends to try and switch sides over the next 3 months!
Does This Matter?
Well, this will definitely cause commotion but, as various objective economists have come out and stated, both parties have contributed to the last 20 years of India having grown at an average 7% growth rate every year - a number that is nothing short of incredible!
Whether it is the UPA’s initiatives in agriculture and education, or the NDA’s financial and industrial push, the cumulative effect has resulted in India coming to the forefront of the emerging markets, despite severe mishaps on the ends of both parties.
Bottom Line - India Growth Story remains strong with the fiscal prudence and structural pillars place. While markets in the near term might be choppy due to valuations looking excessive, the market seems to already guess the outcome of the upcoming election. In this case, the notion of government stability might be vital to the continuation of this growth