Nation
Post assembly elections, time for bold reforms
The just-concluded assembly elections and the unparalleled performance of the BJP have been the highlight of the weekend. The elections, happening mid-way of the partys term at the Centre and coming immediately post-demonetisation, were practically a referendum on Prime Minister Narendra Modis leadership.
 
The party's historic performance in the country's most populous state must have provided him with a sense of vindication and confidence after months of criticism for his bold demonitisation gamble on November 8, 2016. However, the implications of these election results lie far beyond the states and the party. The economy has much to gain or lose depending on the course policy-making takes from here onwards.
 
The magnitude of support shown by voters for the BJP in the states leaves it with a high possibility of being re-elected in the 2019 general elections. The current electoral performance also ensures the party a majority in the Rajya Sabha by 2019, which has been a major hindrance for any productive functioning of the Parliament off late. A sense of continuity and political stability is the best outcome that the nation could have hoped for in times of global uncertainty. The election results act as a positive signalling mechanism for multiple stakeholders in the economy.
 
First, political stability begets economic stability. An assurance of continuity in government policies sends out a positive signal to foreign and domestic investors about the country's economic scenario. No sudden policy shocks to the economy are generally expected to take place in such a situation like the ones taking place in the US right now with the repeal of Trans-Pacific Partnership (TPP) and Obamacare. This will also ensure a continuity in the functioning of GST, which is expected to be inflationary in its initial years of implementation and can become an electoral issue in 2019.
 
As the world moves towards uncertain protectionism, an economy with a stable political regime and sound economic policies that is welcoming to foreign investors can be a beacon of hope. It can also go a long way in reviving the subdued domestic investor sentiment. Although, the latter will also require bold reforms to deal with the problem of bad debts.
 
This brings us to the second point. The confidence instilled by voters in the party can encourage it to bring about a slew of bold reforms that political parties have been holding back for decades due to the fear of losing political ground. To begin with, the long-standing call for labour reforms can be addressed. Such a move will complement the government's intent on improving the ease of doing business and also inspire investor confidence. Additional Measures can include reforming the direct tax code, introducing a Uniform Civil Code and privatisation of white elephant PSUs. An opportunity to make such radical policy changes that have significant long-term benefits come rarely. The Modi government can do well to capitalise on it.
 
The third significant signal: The Indian vote bank has been infamous for catering to caste politics. Uttar Pradesh has been the epitome of such electoral practices owing to its varied population distribution. On the contrary, in the current elections, the voter base seems to have responded to practical calls for development rather than to an emotional connect of erstwhile rulers of UP's political corridors.
 
The change in voting behaviour highlights two important points. The obsession with caste is losing importance at the ground level, and it is the time that the media and political parties recognise this fact and follow suit. Second, the shift to focus on development signifies the rising aspirations of the Indian population and their rising demand for more jobs and opportunities, which has been promised to them.
 
This is an area that the government has been unable to improve upon along with restoring investor confidence in the country. Now, with a significant portion of north and west India under its belt, cooperation between the Centre and the State and coordination between their policies will be much achieved easily. This is much more true in the case of BJP than it was for earlier ruling parties at the Centre since the state Chief Ministers will recognise the contribution that the Prime Minister has had in their electoral wins and will be wary of resisting any policy suggestions from PMO. Therefore, materialising voter aspirations by improving investor confidence, which will already be given a boost owing to the current political scenario, should be on top of the government's agenda. It now has considerable power to act upon this. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Nifty, Sensex to head higher - Tuesday closing report
We had mentioned in Friday’s closing report that the stock market was inching up on global cues. The major indices of the Indian stock markets put up a strong rally on Tuesday and advanced by around 1.71% over Friday’s close. NSE trading volumes were on the higher side, thus justifying the rally. The trends of the major indices in the course of Tuesday’s trading are given in the table below:
 
 
Indian equity markets surged during the mid-afternoon trade session on Tuesday following crucial state election results declared on March 11. Besides, investors' sentiments were lifted by a strong rupee, broadly positive global cues and buying witnessed in banking, capital goods and automobile stocks. On the NSE, there were 944 advances, 523 declines and 75 unchanged. On the BSE, there were 1,703 advances, 1,124 declines and 218 unchanged.
 
Indian equity markets witnessed firm opening, tracking positive state election results for ruling party at the Centre. The benchmark indices witnessed gap up opening on strong buying sentiments, according to market analysts. Bearish USD/INR futures prices also supported the firm sentiments of the markets. Almost all sector stocks traded with firm sentiments tracking over all buying activities in Indian equity markets.
 
India's annual rate of inflation based on wholesale prices rose to 6.55% in February 2017 from 5.25% in the previous month, official data showed on Tuesday. According to the Wholesale Price Index (WPI) data released by the Commerce and Industry Ministry, the annual inflation rate was (-)0.85%  in February 2016. A rise in inflation could divert some fixed income investments into the stock markets and show higher trading volumes over a period of time.
 
US stocks wavered and ended mixed, as Wall Street mainly awaited a possible interest rate hike from the US Federal Reserve on Wednesday. On Monday, The Dow Jones Industrial Average was down 21.50 points, or 0.10%, to 20,881.48. The S&P 500 rose 0.87 points, or 0.04%, to 2,373.47. The Nasdaq Composite Index gained 14.06 points, or 0.24%, to 5,875.78. Traders generally anticipated the Federal Open Market Committee to raise interest rates at the conclusion of its two-day monetary policy meeting later this week. Market expectations for a March rate hike were around 95.2%, according to the CME Group's FedWatch tool. A rise in interest rates could divert some funds of foreign institutional investors from India to developed countries.
 
US total nonfarm payroll employment increased by 235,000 in February, well above market consensus of 188,000, the Labour Department announced Friday. The unemployment rate was little changed at 4.7%. After Friday's jobs report, market expectations for a March rate hike sharply increased. 
 
Coal India on Saturday said its wholly-owned subsidiary Central Coalfields Limited (CCL), which had approved a Rs1,001.88 crore buyback proposal, has decided "not to proceed" with the plan. "..the Board of Directors of CCL at its meeting held on March 10, 2017 has, after reviewing the limited reviewed unaudited financials of the company ended December 31, 2016 based on the Revised valuation Report submitted by the merchant banker, decided not to proceed with the proposed buyback," the miner said in a regulatory filing. Last week, the miner's arm had approved buyback of 5,21,000 fully paid equity shares for an aggregate amount not exceeding Rs1,001.88 crore. It had also said the equity shares proposed to be bought back by the miner's subsidiary would represent 5.54% of the existing paid up capital of CCL. In another regulatory filing, CIL which produces 84% of the country's coal, said its board on Saturday approved to tender the shares held by the company in its subsidiaries -- Mahanadi Coalfields Ltd (MCL), Northern Coalfields Ltd (NCL), South Eastern Coalfields Ltd (SECL) -- in their respective buyback offer. Coal India shares closed at Rs295.55, down 0.76% on the BSE.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Lok Sabha passes amended enemy property bill
The Lok Sabha on Tuesday passed a bill to amend a 49-year-old law to guard against claims of succession or transfer by heirs of property left behind by those who migrated to Pakistan and China.
 
The Enemy Property (Amendment and Validation) Bill, 2016, which was passed by the Rajya Sabha on March 10 at a time when the opposition benches were almost vacant, was passed by the Lower House with voice vote.
 
The bill had earlier been passed by the Lok Sabha in March last year. It had to be taken up by the House again to approve the amendments made to the bill by the Rajya Sabha.
 
The bill amends the Enemy Property Act, 1968, to vest all rights, titles and interests over enemy property in the custodian and declares transfer of property by the enemy as void.
 
This applies retrospectively to all transfers that have occurred after the Act was passed.
 
One of the controversial provisions of the bill is that it amends the definition of "enemy" and "enemy subject" to include the legal heir(s) or successor(s) of the enemy, even if the latter is a citizen of India or a non-enemy country.
 
According to the new bill, the law of succession will not apply to the legal heir(s) or successor(s) of the enemy.
 
The bill also prohibits civil courts and other authorities from entertaining disputes related to enemy property.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

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