Modi Wave : Risk and Reward

Well, equity markets are now approaching the frothy valuations. Scrupulous companies are raising funds through whatever means to take advantage of the high risk appetite of the investors. There is a distinct wedge between the fundamental valuations and current market pricing in certain sectors of the economy. This could converge with the growth in the economy and thus justify the valuations.

Modi Government is taking methodical step by step approach rather than big taking bang approach to bring much needed change in the Indian economy. Several such initiatives are already taken..

• Labor law reform in the some states like Rajasthan & MP; Maharashtra to follow suit
• Resolve to clear mess in the energy sector; One major step is to auction coal mines to private parties
• FDI is Railways and Defense
• Decontrol of Diesel which was unthinkable in recent past
• Expenditure committee to review and make recommendation for rationalizing the ever increasing subsidies
• Transforming the Image of India globally through recent development in USA, Australia,Japan and  G 20 summit 
• Resolve to bring Goods and Services Tax (GST)
• Clean India Campaign : Cleanliness and Hygiene go together which we have been as  a country lacking for so long.. Though look like it is a very clever campaign so that BJP can reach across the country without any opposition. 
• Several on-line initiatives to be taken to cut down on bureaucracy which can bring down corruption at the margin.

Well, above list is just illustrative, however,all such steps are in the right direction to take the country forward.

What about corruption.. Surprisingly government is silent on Lok Pal Bill ( Ombudsman). It is understandable that there entire focus is on the "Growth" while capturing low hanging fruit. Citizen usually fell happy if there is a growth all around them despite with similar level of corruption as if they are getting wealthy. 

It is a long haul journey we are undertaking with new government. Take a dispassionate view on politics. They have the ability, and now what it takes, intention to deliver. It is imperative to stay invested to test the resolve.