5 is just a number

P. Chidambaram was waving to the media an open palm during transfers from CBI Headquarters to Court. I thought he was saying, 5 years, the prison  time he expects to be rewarded or perhaps, he will be out of jail in 5 months. Like a good politician, he was talking about the GDP of the economy, which stands at 5%, instead of talking about the case for which he is under investigation. Criminals make for best politicians. Chidambaram is finest and stands tall with our Home Minister.

Is GDP number a big deal?? It is to the economists, it is to our PM as well. He changed the role play of numbers and figures in GDP calculation to show a strong growing economy from 2014 to 2019. But again does GDP matter, when people are happy and so hopeful that our PM will change the fortune and the future of our great nation, even though they say, his efforts in last 5 years have borne little fruit. All of us should stand with the ideas of our honest PM.

But 5% or $ 5 trillion?? $ 5 trillion is the figure, which our PM has given to the people of India as they gave him huge numbers in terms of votes in May 2019. The PM gave himself the target and support of the people, to help India become $5 trillion economy in next 5 years, before his next term. Modiji is always thinking ahead in terms of elections. And doubling it again by 2030 to $10 trillion economy.

When did we have a PM, who challenges himself in the open for the exact number on the size, never before Mr. Modi. Since the Govt. has numbers, so Govt. can push reforms and build strong policy for enabling growth in the economy, for bringing more investment in the economy. At time, I wonder, do we Indians actually deserve such a hard working PM for elections?

Fortunately or unfortunately, instead of GDP rate going up, it is going down. But understanding from where $ 5 trillion figure came, we will know where we are headed. India’s economy in terms of size is $2.7 trillion in March 2019. To get to $5 trillion, even if we grow at 8% annually every year, it will take 8 years to reach that number.

If India grows at 10%, year on year, then also, it will take around 6 years to reach the figure of 5 (trillion in dollars). No economy in the world has ever grown in double digits. China may have pulled off that spoof but then the world wonders about the integrity of their data. I guess Modiji knows, we cannot achieve $ 5 trillion in 5 years, even if whatever level of creativity is fed into statistical data.

But I believe we are heading for double digit growth in FY 2021, for the first time in the history of this country. Though the similar formula will be replicated over next years will remain a challenge. First the Govt. is working on the data, to make the base look of FY 2020 smaller, paving the way for double digit growth in FY 2021.

The PM understands there is some good news, he has to feed people so that they keep voting for him. There could be some landmarks in the mean time, like RCEP, though this failed, but there can be other initiatives from the Govt. to pull India out of its rabbit hole but it is easier said than done. Delivering GDP growth of closer to 10% as predicted by IMF numbers will be the test, on which we are already floundering to match the dismal growth rate of under 7% averaged for last five years. Mind you, this 7% is also worked out by reworking the statistical data over and over again with different permutations and combinations, which remains confidential.

The larger point comes to the fore, today in first week of November 2019, when the PM is hard selling India to Thailand to invest in India; with the assumption, India is the best place to invest in the world. Even if we achieve GDP size of $5 trillion by 2024, when the people want to protest for clean air in the national capital region of India, they cannot go out to protest in the open. Instead they are hunched at their homes and tweeting about the poor air quality; Philips is laughing its way to the bank as they are selling air purifiers in between season of coolers and heaters.

There have been floods in the city of Chennai or the latest one in Bihar, when the state capital is filled with water that people are not safe, even on first floor of their houses and the Deputy CM had to be evacuated by the Disaster Agency. Water crisis for daily needs is an issue, from which such a large population of India is grappling.

Maybe the PM believes the full effect of demonetization and GST will reap its benefits to the GDP to help us achieve $5 trillion GDP. Apparently, we are yet to hear a road map for becoming $5 trillion economy from any member of the Govt. Our dearest FM, Nirmala Tai, smokes fire when its comes to questions related to the economy. Analysts and Reporters leave the FM with the final question of how Congress is skeptical about Govt.’s words and target? She justifies her position to her party with only fire to this question. At times, I feel, FM is always irritated, is it for the Press Conferences or is that her basic nature in the Finance Ministry meetings as well; as if she hates all human beings.

Govt. did make genuine effort to reach to that point to ensure we are closer to number 5 but instead of keeping $5 trillion in sight, they hugged the 5% GDP growth rate, which is very close to half to IMF Projections of 9.8% average growth in economy for next 5 years. PM will be shouting at his campaigns with his punja (open hand display of 5), we promised 5, we delivered 5.

The poor people of India wouldn’t know, Modiji promised us $5 trillion (which would have come at 10%), instead he gave us 5%. Modiji promises and he delivers in his speeches. The honest PM, who delivers with honesty and his hard work for the elections.

BUDGET - 2010

Budget definitely takes much of the news and newspaper section leaving little room for abused, drugged, raped, abducted and murdered Indians. Such is the phenomena or the euphoria created around the Budget. Over the past few years, Budget just became an annual exercise esp. in this era of coalition politics, when the Govts’ purposely kept the important decisions outside the preview of the Budget and made it merely a Profit & Loss Statement than an Annual Report.

The only Budget that financial pundits remember or would like to think are 1991 Manmohan Singh Budget, 1998 PC Budget and of course, Yashwant Sinha from BJP had been the cynosure for drawing flak from all the six corners of India. The lackluster annual exercise by Pranabda during last year, the analysts and experts had not built any hopes. Will this Budget be remembered for the staged walk out by the Opposition from Lok Sabha, perhaps first or something else? I really liked the fiery style of Sushma Swaraj and her command over Hindi and the way she made her points. As the saying goes, success honours you and destroys you at the same time. She is currently redressing to the later part of the saying. The Opposition walked over one rupee rise in oil prices. It will add to the woes of the inflationary pressures. But then market expected to rise by few rupees, so it was still a breather. Moreover the Govt. should always be thinking in favour of OMCs (Oil Marketing Companies).

Yes the food inflation and food security is one of the biggest concerns for India of today and will remain tomorrow and not the growth or the GDP. 60% of our economy or India is dependent on agriculture, yet we are not in a pitiable state either. If your battered vehicle cannot give improved mileage, then we reduce the amount of petrol which goes into running the engine. But our Govt. has tried to undertake something better. They have increased the tax slabs for individuals, which in other words, increases the real income in our hands.

But this Budget is perhaps one amongst the best with the caveats, Coalition Govt. and the Financial Crisis. The Govt. has been juggling with the lower demand of products and services, lower exports, rising inflation, rising fiscal deficit and to top it all, they had slashed tax rates, duties, cess’ applicable on sundry and all and sacrificing income, still they are able to lower the fiscal deficit and feed the poor developed or perhaps poorly managed schemes for the poor. I liked the renewed focus on Agriculture to bring something positive in this space. Hope they are able to pull this off. Because in India, all the good things are virtue of our politicians and all the bad things are blamed on the monsoon.

The FM made a point throughout his Budget speech to usher in a process of inclusive growth. The inclusive growth can be achieved by bringing the economy back on growth path with GDP of 9 % per annum and to take the government back on the path of fiscal consolidation.

Private players will be issued Bank Licenses. In 2002, RBI cleared few licenses and now after a long lull they will be issuing licenses. Reliance (non-reliable) Bank, Singh (Religare) Bank, Birla Bank, Modi Bank, India (IndiaBulls) Bank some of the leading financial services/NBFC conglomerates will be vouching for that slot. As a consumer, it will become more harassing to entertain few more useless marketing calls from few more useless service providers. At the same time, I hope something better from these new-age industrialized houses to better the customer experience.

Direct Tax Code, General Sales Tax Regime may become a reality for FY 2011-12.

Markets cheered and roared for Pranabda’s efforts which touched an intra-day high of 350-400 points (2 %) at the conclusion of Budget speech and still managed to close at 175 points (1 %) in positive.

With the hope to leapfrog the growth rate of Indian economy in double digits, Pranabda concluded the Budget 2010-11.

Are we looking at a new BOTTOM?

The above graph was cut a month back. I don’t know whether we are heading to it. But the charting analysis took decades to develop and then for decades it was tested. Few researchers in US analyzed that the wave lines drawn on chart conjoining the daily market movements, form certain kind of patterns on it. They studied and came out with sure movement which when started would move in that particular. Although save the intra-day movement. Then Japanese with their die-hard attitude and standards of research invented Candle Sticks and indeed indicate sure accurate patterns with their candle light patterns. But I hardly got to learn their patterns.

Then Mr. Elliot came and gave us the Elliot Wave Theory. Seems so fucking brilliant to have a theory in one’s name. Mr. Elliot studied the market and then gave a remarkable movement after a much thought/research had been conducted on these charts.

The above chart is making a movement like Elliot Wave Theory. Is that a big deal to follow the Elliot Wave Theory? But according to the theory, it is headed towards one of its most horrendous phases. The last leg called C is a nightmare for investors/traders. We are now looking or it seems likely that the Sensex may touch 9000 or 8000. That’s more than 40% loss from the current levels of 15000. Its hard to believe but it may be true. A pattern formulated on charts stretched over years is generally correct. In this case, the pattern has been formed over a period of last five years on monthly movements.

I really don’t know whether it will complete the last leg C of Elliot Wave Theory. Particularly during this time, when there are positive news coming from different corners of the globe. Indian economy is working its way up fast, global economy is recovering, Chinese and Obama are not doing anything foolish.

But looking at the theory it should. This month the market under most likely circumstances will close below the level of previous month’s closing and if it continues to do the same next month. Then by year end or beginning of 2010, we are heading towards a new low. Under the theory, it should fall below its previous low i.e. leg C goes lower than leg A.

Bulls may be trying to defeat this theory. Bears may be finding their way in.

Who wins and how is the question which can be decided when the time comes?

In the meantime, everybody will be hoping that Bull trumples the Bear to keep their smiles intact.
May Lord give the strength to Longs over the Shorts.