ROAD AHEAD = Lessons from Elections = Economy & Stock Market in 2012

ROAD AHEAD

Lessons from Elections

Plus

Economy & Stock Market in 2012

Now that the Election Results are assimilated by India – what is the Road ahead for Indian Economy.

If UPA and BJP learn their lessons properly – the road ahead is very good for the Indian economy and for the  stock market.

UP goes from Mayavati to Mulayam. There is no change either for Congress or for BJP – except missed and muffled opportunities in UP.

Ø  Congress, it is obvious – will never win by wooing Muslims through Reservations. What it promises to Muslims has to be taken away someone else – and that some one need not feel obliged to vote for Congress, for taking away his bread and butter from him and giving it to the Muslims. Wooing specific castes and specific religions in Elections does not befit a party of the stature of Congress – which must aim for integrated development of all.

Ø  Reservations, per-se, imply mere distribution of Jobs – and not fresh creation of Jobs. Government is promising a small percentage of almost non-existing vacancies in Jobs  to Muslims, which any way, it has to take away from some others. The others who compete for those Jobs are not Rich. They come up the hard way after qualifying in secular Education. 

Ø  Secular Education : Muslims qualifying in secular Education are progressing very well. They are in Industry, trade, government and everywhere. Muslims who are not progressing are those who go for – religious or Madrasa Education. Therefore, the reservations are pointless. Muslims must be encouraged to take up secular education – for qualifying for jobs or other economic activity.

Ø  ANTI-CORRUPTION & BLACK MONEY AGITATIONS : The rough and crude handling of anti-corruption and Black-money agitations of Team Anna and Swami Ramdev – were Bad enough to earn Congress, huge negative marks all over the country. This time around - Team Anna and RamDev did not vociferously campaign against Congress – BUT future could be different. 

Ø  Lok Pal issue is actually one – on which Congress can easily take huge credit – by bringing a good Lok pal bill -  but, it seems bent upon doing the reverse.

Ø  BJP, on its part, will never win in UP in a big way as long as it keeps Ram Mandir on its Political Agenda. Ram Mandir can be a religious Agenda for VHP or Bhajarangdal. 

Ø  RAM MANDIR issue should never be on the Political agenda of a National Political party of the stature of BJP – especially when the issue is before Courts of law. RAM MANDIR issue  prevents BJP from winning many WINNABLE SEATS in all other states as well. 

Ø  Examples of Gujarat, Goa and Punjab : BJP is winning  well in Gujarat – where Modi has eschewed Non-secular Agenda totally. Ram Mandir is not an issue there. BJP has won well in Goa too - by projecting a Non-secular Image. Its partner in Punjab, the SAD projected a secular Image and took a huge chunk of Hindu + Sikh vote there. Unless BJP projects an equally secular Image, it can even become a non-entity in Punjab losing its votes, not to its opponents, but to its Partner, the SAD. BJP must learn these hard lessons which people are handing it over.

Ø  NON-VOTERS : In UP BJP also failed to get its traditional Vote Bank to vote for it in larger numbers. Over 40% of voters did not vote in UP. Though the number and percentage of voters who voted has increased from 2007 – it is still woefully below all other states which went to Polls. The Non-voters, I guess, come from middle classes, trader classes etc. It should be easier for BJP to target and get their votes – if only it projects a developmental manifesto beneficial for them. 

Ø  Uma Bharti can talk a lot – but does she talk of a developmental Manifesto – like Modi does in Gujarat? Neither Uma Bharti, nor any other state level leaders of BJP in UP projected any serious developmental Manifesto and Mindset of BJP – which is essential for winning people’s hearts and Votes. 

Ø  Arun Jaitley’s thinking that being third in the state is a big drag on getting more seats and votes is only partially correct. Both SP and BSP are winning on about 20% or less of the TOTAL VOTES AVAILABLE for voting. If BJP can get the non-voters more interested in voting for it – it can win head and shoulders above both SP and BSP. But, it must also project a Secular, developmental Image.

Ø  The same holds good for Congress. It projected a woefully non-secular image. It therefore lost all non-muslim votes.  Next time around, if it does not come up with a Good Lok Pal Bill, Team Anna and RamDev will be more than justified in campaigning actively against Congress on Corruption and Black Money Issues.

Ø  BSP lost – because, its vote Bank consists of a small section of society. Unlike last time, it did not project a broader image this time. Why should others vote for BSP, if they are to lose by such voting? Mayavati must reflect on this. If SP and BSP have won more seats than BJP and Congress – it is more because, 40 % of total voters failed to vote. If they had voted, both BJP and Congress would have benefitted in a Big way – and probably they would have been Number one and two.

Now- with these lessons before both BJP and Congress – let us look at Our economy and stock Market issues.

These Elections are almost non-issues for National economy. The new state Governments are not going to be worse than the old ones – in respect of economic issues. Mulayam Govt may be known for Goondaism earlier – but not for anti-industry stand. At National level too – on crucial developmental issues, with more floor co-ordination, important Bills can easily sail through. Congress needs some adjustability in these Bills. The Lok Pal Bill invited so much criticism because it was a BAD BILL – not satisfying any criteria which can make for an effective Lok Pal.

Land Acquisition Bill can pass through easily – if only it is presented in its more generous Draft form. Allow generous compensation to Land Owners – so that Land acquisition passes through easily in every future case. Else, in its present form, you may invite some more suicides and more ill-will from the farmers and other land owners whom you will deprive of their land (and their present livelihood) without reasonable compensation. This has not an iota of connection with election results.

So is the case with clearing expenditure on Infrastructure projects. Who prevents this? None. Allowing  more mining in forest areas (where ores exist) and creating more forests where no ores exist is also a simple decision. It is only UPA which has to take the decision.

Importing Gas for Gas based projects and quickening the pace of Gas exploration and commissioning of pending projects – is also a decision to be taken by UPA.ONGC is announcing so many gas / crude  findings – but how quickly will it exploit them –depends upon – making it partner with an efficient and experienced private sector company and allowing that company a free hand. Like Reliance did with BP.

Road Projects are also to be cleared faster – and watched for quick pace. Where Land acquisition is the problem – generous compensation is the solution. Government must adopt this stand.

2012 can be a great year – merely by taking these pending decisions immediately.

Next comes 2 important Economic Decisions. 

1.   INTEREST RATE REDUCTION : RBI raised the interest Rates almost every month in 2011 to tackle Inflation. Inflation did not respond to the raising interest rates for very obvious reasons. But, high interest Rates hurt many sectors of economy. When prices did come down, they came down because of more agricultural output – which has nothing to do with RBI interest rates. On the other hand, RBI’s high Interest Rates have brought down Manufacturing sector growth considerably. Liquidity crunch in the economy started hurting Growth very badly and RBI has done the right thing by easing CRR by 0.5%. It can ease it further too. But, easing CRR without reducing Interest rates puts our Manufacturing Industry at a huge disadvantage vis-à-vis Imports. This is happening. Chinese and other Imports are taking over our manufacturing industry gradually. RBI must study this aspect and roll back interest Rates sufficiently and urgently – before too much damage is done to the manufacturing Industry in India.

2.   BUDGET 2012 :  Revenue Growth did not match growing expenditure in 2011 – but the reasons lie squarely at the doors of Government and RBI. Neither of them were worried about Growth in 2011.Not a single decision was taken to spur growth. But, 2012 can see good, double digit growth with much less Inflation than 2011, if only both Government and RBI bat for Growth.

3.   PROMOTE LOCAL INDUSTRY : Government must take all possible measures to promote indigenous Industry – and make it more competitive and more efficient than the Chinese and Koreans. It must give indigenous Industry more tax sops and tax the imports more heavily.

4.   Ministry of Industry and Commerce : This Ministry must become a champion of modernization and innovation for Indian Industry – especially the SMEs. It must make 2012 a YEAR OF MODERNISATION & INNOVATION. Ultimate competitiveness and quality  in Indian Industry depends on these 2 key factors and the ministry must concentrate o this.

5.   Adequate tax benefits for R&D efforts in Indian Industry is essential to change the face of Indian Industry. State Governments must also tax foreign articles at higher rates than Indian articles and ensure that Indian articles retain their competitiveness. All taxation efforts must keep this in view.

6.   Air line sector is bleeding. Air India and King Fisher are both badly managed. But, other Airlines are also not in any great health. Taxes and the Rates for ATF in India are TOO HIGH and need to come down drastically. Without reducing these taxes, merely infusing more money into these Airlines will only prolong their Agony for a year two more. But, if taxes and fuel rates are drastically reduced making the Airlines healthy – what Governments may lose in taxes and Fuel rates will come back to them – as these Airlines become healthier, improve their seat occupancy, their revenues and profits. Central Government should reduce its rates and taxes. It must also impress on state Governments to reduce their taxes in Air lines.

7.   Telecom is another sector which can go the way of the Airlines. MTNL and BSNL are already bleeding. None of the Telecom companies are making sufficient money to induce them to invest further in India. There is obvious flight of capital from India to other countries in this sector. As Government has said in its review Petition before Supreme Court, Pure auction can not be the route always for all public services. Long term public good must be kept in mind. First come, first served principle – irrespective of the credentials of the suitors, as was done by Shri A. Raja, is of course, bad at law. Government must have the choice – to choose all the existing operators plus a few experienced operators from outside. State-wise licences are now unnecessary. All operators must roll out services in all states. This implies that – overall we cannot and need not have more than eight operators at the maximum in India – with all of them rolling out services all over India. Choose the Best and reject the rest.

8.   Shri Pranab Mukherjee, our FM,  need not unnecessarily worry about Revenues slowing down in coming year. They have slowed down in 2011 because of the High Interest Rate regime of RBI and the consequent slowing down of Growth of Industry. In 2012, situation will improve if the FM impresses on RBI to roll back interest Rates by 2-2.5% immediately. Growth will pick up quickly and more tax revenues will start flowing in  at a greater speed. Contrary to what Government and RBI thought – RBI’s interest Rate Regime in 2011 slowed down Growth, resulted in less revenues, which in turn resulted in More deficit financing, which in turn has become the cause of Inflation. The Medicine for Inflation has become the cause of Inflation. Now, reduce Interest rates and see the reverse happening.

9.   Shri Manmohan Singh : Our PM, when he takes initiative, leads in right direction. Now, when individual ministers show some sluggishness in acting, PM must intervene more actively and in time – to move matters. Land acquisition Bill need not have been pending for so long. When it comes up, it need not come up in a form which will be unhelpful  and unsympathetic to Land owners. These are Bills where there need not be any differences between opposition and Government. So are other roadblocks for most economic bills. I will not call FDI in retail a reform Bill. As of today, India retailers will be badly affected – and all the so called benefits to farmers cannot neutralize the impact on retailers. Also, when one looks at the No,.1 retailer, the Walmart, we don’t see where Walmart has helped farmers the way Government is touting. PM needs to promote and fast-track growth in all sectors. FDI will flow in automatically.

10.                STOCK MARKET :-With Government acting on some of the pending bills and RBI acting for Growth, stock market is bound to pick up impressively in 2012. There may be more heated Political debates in Parliament. They notwithstanding, economy will improve anyway – and company performances will improve impressively in 2012. The sluggishness of UPA will go – and it will strive to perform well. So, in my opinion, Great days are ahead for stock Market too in 2012.

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ELECTION RESULTS 2012 - ANALYSIS - TOUGH QUESTIONS TO ANSWER - FUTURE FOR ALL PARTIES !

ELECTION RESULTS

MARCH 2012

The Election Results for the five state Assemblies are out finally. Let us look at Some of the High lights , and what they imply for future. What happened, what did not happen, and what should have happened - all make interesting reading. read on :

1.   In Punjab, the voting % in 2007 was 75.36%. It has risen to 78.57% in March 2012. Men voters are 78.09% and women voters are 79.10%. The increase in voters is 1142416 in Nos and it is up by 8.96% over 2007.

2.   In Uttarakhand, the voting % in 2007 was 63.96%. It has risen to 67.22% in March 2012. Men voters are 65.74%% and women voters are 68.84%. The increase in voters is 381975 in Nos and it is up by 9.95% over 2007.

3.   In Manipur, the voting % in 2007 was 86.73%. It has FALLEN to 79.8%% in March 2012. Men voters are 57.82%% and women voters are 59.85%. The decrease in voters is 90860 in Nos and it is down by 6.14% over 2007.

4.   In Uttar Pradesh, the voting % in 2007 was 46.07%. It has risen to 59.48% in March 2012. Men voters are 58.82% and women voters are 60.29%. The increase in voters is 23967800  in Nos and it is up by 45.81% over 2007.

5.   In Goa, the voting % in 2007 was 70.51%. It has risen to 81.74% in March 2012. Men voters are 79.67% and women voters are 85.97%. The increase in voters is 125577in Nos and it is up by 17.63% over 2007.

6.   Total Voters in 2007 in these 5 states were 7,10,88,348, whereas, the total Electors  in March 2012 is 154013353; the total Voters in 2012 is 960575526; the increase in electors is 14827986; and the increase in Voters is 24969178

Source : http://eci.nic.in/eci_main1/ge2012/SVEEP532012.pdf

Thus, in all the five states, women voters outnumber men voters by an impressive percentage. Goa has more women voters% than Men voters%  compared to any other of the 4 states which went to Polls.

We are worried generally that women percentage in total population is coming down – but, their assertiveness is obviously going up.

In Goa, percentage of Voters in 2012 March - over 2007 is up by a good 17.63% this time.

But, Uttar Pradesh has the highest percentage increase of voters over 2007 –  up by a percentage  of 45.81%.

But, with this increased voters percentage (in March,2012) over 2007, the total voter percentage is still the LOWEST in UP among the 5 states with just 59.48%; whereas Uttarakhand had a voter turnout of 67.22%; Punjab had 78.57%; Manipur had 79.8% and Goa had the highest at 81.74%,

If UP had a Voter % in 2012  at least equal to Manipur i.e.,67.22% (up by around 8%) – would the results have been different?

Suppose, UP had a voter % of 78.57% like in Punjab, what would have been the shift in the result? Would it still have been the same?

More interestingly – VOTERS WHO DID NOT VOTE - CONSTITUTING ABOUT 40.52% (100-59.48%)  in this Election in UP - What are the implications of this Low Voter turnout?

40% of the State (a large state like UP)  not choosing to vote at all – for one or the other contesting candidates is obviously not a healthy sign for democracy.

By contrast, Punjab, Goa and Manipur have impressive voter turnouts. Even Uttarakhand is better but is not impressive as the other three states.

So, who exactly has not voted in UP, this time? Difficult to Guess. But, Guess we must. Usually, it is more likely to be the upper castes, or, the Middle and wealthy classes, or those, who feel, more dignified than they need to feel – these are more likely to be the people who talk more but  vote less.

I feel there should be data collection on this point by the likes of Yogendra Yadav who are experienced Predictors of Poll results. I may be wrong in my assumption - which is a wild guess. But, we all want to know – and I am sure, all readers would want to know - who did not Vote in UP and why?.

Suppose, the upper castes did not Vote – for any good or bad or no reason – or, because, they may not have seen any one worth voting for, as a winning candidate  – it is just a hypothesis – and if they had voted, whom would they have voted for, and how the result would have tilted in that case?

This guess work can be repeated for all those classes who failed to vote in large numbers – if we have some reliable data on this.

If Elections should really reflect People’s will –India must find ways to make this absentee voters also to vote definitely. A voter turnover less than 80% is not really good for Democracy

Now, with 59% of total voters exercising their vote – and four Major Parties in the Fray – and the winning margins being thin - and with most candidates not losing deposits – How much of the TOTAL ELECTORS PERCENTAGE have the winning candidates got, and how much the loser candidates have got?

It is easy to congratulate the winners and console the losers. It is easy to attribute reasons for the winner ‘s winning and attribute reasons for the loser’s losing.

But, what reasons exist for the vast number of people NOT VOTING?

Suppose RIGHT TO REJECT option was there on the vote – would these absentee voters have voted and exercised their RIGHT TO REJECT -  or, would they have still stayed at home?

If they had exercised the RIGHT TO REJECT – in their vote itself in UP, what difference would it have made for this State?

For India to function as an efficient democracy these are pertinent questions to ask and find answers – and remedy them.

But, this said – as all this is futuristic - there is no need to take away the winners’  happiness and the losers’ introspection at this point of time.

Winners are all entitled to CONGRATULATIONS. People have reposed faith in you – Please perform in the best interests of ALL PEOPLE.

Next time, the absentee voters also must come out voluntarily and vote for you all – in all the states.

The message holds good for losers too. Please perform your job as opposition so well – that next time, the voters will all vote for you.

The Party Position (of winning candidates) is as below :

PARTY	U.P	PUNJAB	U'K	GOA	MANIPUR
CONGRESS+	37	46	32	9	42
BJP	47	12	31	24
AKALIDAL		56
SP	224
BSP	80		3
PDF					1
TMC					7
OTHERS	15	3	4	7	10
TOTAL	403	117	70	40	60

MANIPUR : Congress has emerged as the single largest Party in Manipur with 42 out of the 60 seats. BJP has drawn a Blank there.

UTTARAKHAND : Congress has emerged as the largest Party in Uttarakhand with 32 seats. BJP is the second largest with 31 seats while others have 7 seats. IN U’K, it is to be seen – if a stable coalition will emerge comfortably crossing the Half way mark of 35. BSP has 3 seats, UKD 1 seat and independents 3 seats. BJP’s Ex CM BC Khanduri lost the election this time to his Congress Rival.

PUNJAB : BJP+Shiromani AkaliDal combine have emerged as the largest combine in Punjab with 68 seats out of a total of 117 seats. Congress is the second largest with 46 seats. A heartening feature is – SAD has thrown away its SIKHS ONLY  tag and has given tickets to a number of Hindus too – who have won by comfortable margins. SAD becoming multi religious party (or secular?) is in contrast with some so called secular Parties seeking vote on caste / religion basis.

GOA : BJP+ has emerged as the largest Party (COALITION) in Goa with 24 out of a total of 40.

Uttar Pradesh : Samajwadi Party has emerged as the winner in UP with 224 seats put of a total of 403 seats. BSP stands as the second largest Party in UP with 80 seats. BJP is at third Place and Congress combine at a poor 4^th place.

One lesson  for all is – to learn from SAD – Please shed all of your caste and religion based agendas in Elections. Ram Mandir can be a religious or social issue – but not a Political issue any more. BJP can shed this image – which is unnecessary for a party of its stature. It needs to learn from its own successes in Gujarat and Goa where Ram Mandir is not an Issue. Ram Mandir, in my opinion, is costing BJP too many wins - totally unnecessarily. And, I (as a devotee of Ram) say that.

Congress, for its Party, must shed its appeasement Politics, focusing one this or that religion or caste. Rahul, can be a Great Leader, if some others don't make tongue-in-cheek comments and spoil the good effects of his efforts. He may make mistakes, but can learn fast. No one can forget how he humbled the Shiv Sena by his visit to Maharashtra. This time, his UP campaigns may have failed due to various factors - but, as he said, he is in it - for the long haul.

Even Samajwadi Party and other winners need to shed their caste Orientation completely. Mr.Akilesh Yadav’s efforts seem to be in that direction – and these have reasonably paid off.

BSP, with 80 seats, should shed its Dalit Image and Dalit orientation. Ms.Mayawati must try to integrate Dalits into the main stream and not keep them as a separate Vote bank.

In sum – Unite India. Do not Divide – on any basis whatsoever.

Let us have Progress For all – with unity of all.

= yours

v.vijayamohan

*e&o.e

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