Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Will the new FM bite the reform bullet?
Wed, 8 Aug Pre-Open

Great power brings greater responsibilities. The person who will most agree with us this point of time will be the Finance Minister (FM) of the country. India has been rocking back and forth between slow growth rate and rising inflation. With the rupee touching new lows against the dollar and Indian equity markets painting bearish scenario since the last four years, the job of the Finance Minister is more hectic than ever.

On one side, the pressure from the market to introduce liquidity is high. But high liquidity without any substantial growth and investment is only likely to fuel inflation further. And that certainly is not in the best interests of the economy. We hope that the Finance Minister is wise enough to take a lesson from the US crisis some years back, the scares of which are still fresh, before giving in to market friendly demands.

So what should the FM do? We believe instead of focusing on short term liquidity, the FM should pull out all the stops to implement tough policy reforms. Some of these include long due reforms like reducing fuel subsidies, power sector reforms and taxation reforms (introduction of Goods and Service tax).

However, this is easier said than done. This is because unlike market friendly measures (infusing short term liquidity), economy friendly measures do not favor political motives. And without a strong political backing, no reforms can see the light of the day. For the lack of the latter, we have delayed reforms enough. While we somehow managed in the past, the challenges that the economy faces now leaves little room for disagreement on taking tough measures. It was a crisis in 1991 that forced us to take some reforms after a long period of dormancy. As the country seems to be coming full circle, we hope that the Finance Minister will unleash the next round of revolution.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Will the new FM bite the reform bullet?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Mar 19, 2018 (Close)