- In its first few days of governance, the Modi govt looks set to lift most of the economic and structural constrains that had threatened to dampen its promising rise:
- Economic constraints:
- Foreign investment in India has rised up to $11 billion since January, and around 3.8 lakh Indian investors forayed into the markets through mutual funds in April.
- Rs. 5000 crore worth of equity was pumped into Yes Bank and Kotak Mahindra, while DLF managed to raise Rs 512 crore of debt on good terms.
- Stocks of infrastructure companies that were looming under huge bad debts have soared 50-100% in the last month.
- Liquid cash has also entered into the most constrained sectors.
- Political and structural constraints:
- NDA controls only 63 of the 250 seats in the Rajya Sabha, but 338 out of 545 seats in the Lok Sabha. This will suffice to offset its deficit giving it 401 votes out of 795 in a Joint Session. (Joint Sessions are called for in cases when both Houses cannot agree on a Bill)
- Resistance in Rajya Sabha will also decrease as States will restrain from having clashes with the centre on frivolous issues thereby giving the NDA a smooth ride.
- On the state front, besides its win in Seemandhra, NDA also seems to be set to gain in Jharkhand, Delhi and Uttarakhand where the coalition seems to be crumbling.
- Even in Maharashtra, Haryana, Bihar and Kashmir, where elections are likely to be held in in 2015, NDA seems to be poised for a win. All this will lead to NDA controlling 14 out of India’s major 21 states increasing from its current number of 6.
- This may help Modi tide over resistance offered by states in areas involving their State jurisdiction.
- This will also help reduce the backlash from decentralisation of power, as the NDA will still control 2/3rd of the states.
- However, many other constraints such as chronic food inflation, a new licence-permit raj based on environmental and land acquisition laws, and a fearful bureaucracy that doesn’t move files still remain.
- Read at: http://epaperbeta.timesofindia.com/Article.aspx?eid=31806&articlexml=SWAMINOMICS-Powering-up-Modi-may-soon-control-two-01062014015030
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