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The Equitymaster Research Digest

If India Takes a Socialist Turn, What Happens to Stocks?
Mar 29, 2017

  • Is the Modi government turning to economic socialism?
  • Why stocks are your best bet if it does...
  • Rahul Shah's 'Smart Algorithm'

There's a creeping trend in India.

Few noticed it at first. But more are aware of it now.

It doesn't matter which party is in power or what the pre-election promises were...

This trend does not change.

I am talking about the government's role in the economy. I am talking about creeping economic socialism.

I'm not talking about the poor state of public sector firms. Although that is a part of the problem...

I'm talking about the role of the Indian state in our lives. It's not something most people think about much. But they should.

Consider the Finance Bill Parliament recently passed.

Usually, this is a boring annual exercise. The common man doesn't care about it.

The finance minister presents the Union Budget along with the Finance Bill. The budget speech gets a lot of attention. But it's soon forgotten.

The budget is then debated by our MPs. They make a few modifications. Introduce a few minor amendments. But the final version has no serious changes, and the Finance Bill is put to vote.

This story plays out every year.

But not this year.

In case you didn't hear about it, the Modi government just increased its power significantly.

The final version of this year's Finance Bill contained amendments to forty other laws! Some of them had nothing to do with finance.

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