A robust GDP and an assertive upward movement of the Sensex establishing yet another record signal and confirm to the global economic and financial worlds that the May Bull run at the BSE was neither a market freak nor a bubble but a real thing.
The abrupt meltdown of the market cap across counters was more of a psychological surrender rather than an indication of any weakness of the economic or corporate fundamentals. There has been no let up in the Indian corporates' acquisition spree across the globe. Indian businesses are truly thinking and acting global and are firmly set in their resolve to become multinational business entities.
Cashing in on the reforms process and global attention, the country seems to have resolved to pursue the goal of a prosperous India with unstoppable and unsatiable zeal. Removal of poverty, development of infrastructure, and universal literacy are on government's priority list. Rural employment and cheap credit to the farmers to keep the ranks of Naxal in particular and the level of rural discontentment in general from swelling are pointers to our resolve of not only joining the ranks of developmed nations but also of making India an economic powerhouse of the future.
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An Economic Super Star in the Makiing
The world at large seems to have changed its perception of India overnight. Only till yesterday people abroad won't even entertain the idea of extending credit to Indian companies. Today, the the most fastidious of banks and financial institutions are making money availble for acquisition of forein businesses even at zero interest. The world seems have suddenly realized or perhaps spotted a strain of genius in the Indians in so far best management capabilities and practices are concerned. India is truly shining.
The shine may not be burning so bright as to light every home but it is bright enough to to kindle in every heart a hope of seeing a happy and healthy India in the not too distant future. A shining India is a reality and not a policitically motivated propaganda as was made out to be by the sponsored media coverage in 2004.
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The Transformation
The rapidity of economic development in the wake of globalization has taken even the people of India by surprise. India and Indians suddenly found themselves occupying the central stage of the world in political, economic and cultural fields. Recognitions for our literary, art and sports achievements are pouring from all corners of the globe. The all conquering Bharat Mata out to spread her wings with a message of peace for the strife ridden world. India has become one of the most sought after destination for business, healthcare and tourism in the world.
All this has thrown open a whole new world of wealth for the Investors in India. The boomers and Gen "X" are in the most envaible postion as investors. They have the opportunity to invest at a time when the country is in formative stage of building a new vibrant India. A new star is readying itself to shine brightly in the economic horizon of the World.
Time to Give a Shine to Your Investments
For invesors, it is a time to give a shine to their investments. The state is encouraging potential investors to participate in and adopt the equity culture directly or through the mutual fund route on an increasing scale so as to enable them reap the fruits of development. By gradually making the guranteed small saving investment instruments less and less attractive, the country wants investors to grasp the fundamental reality of the world of demand and supply underlying the market which is the final arbiter of economic worth of all individuals and business entities. There are huge nuggets strewn all over the equity path to prosperity and wealth creation. They are waiting to be picked up by the more valiant.
Investment - Thinking Global
The need of the time for investors is to pepare themselves for bracing a bit of risk. People who do not mind a bit of risk alone can expect higher returns, returns enough to beat inflation and to provide for a better tomorrow. The era of guaranteed high returns is over. The investment scenario has acquired global dimensions. Spreading investments across whole range of assets - like stocks, bonds, real estate, commodities and foreign equities may become not only unavaoidable but a norm.
Knowledge of the way the futures markets function, global stock price movements, trends in output and movement of goods and service across national boundaries and global the energy scenario are likely to offer themselves as subject worth studying and must as such engage the attention of more serious investors.
Getting to know the art and science of equity investing may not be practical or possible for all investors. But every investor can dabble in the financial markets through the agency of mutual funds. It is time, therefore, to get acquainted with the jargon of mutual fund industry, its products and schemes. The economic churning currently taking place in the country offers one of the most tempting opportunities to get invested in one of the most attractive investment destination. Global funds have either acquired or are in the process of acquiring financial and other assets here for they see in the present development of India a possibility of strinking gold where ever they dig.
The Flip Side of the Story
We have had enough of the shine story as also of the tremendous wealth generation potential that the present economic boom offers to the investors.The dark side must also be probed and looked at. In fact, the negative aspects outnumber the positive achievements. The stories of the famished children with empty eyes looking upto a frail mother for food is something that have to be consigned to the dark recesses of history.
Corruption, illiteracy, poverty , inadequate infrastructure, discontentment are as rampant today as they were ever before. The gains are there but only for a select few. There is a huge economic divide leading to further dissatisfaction feeding the Naxal and Maoist tendencies in certain pockets. Profits and salaries in certain secort are growing at the cost of other sectors deepening income disparities and sowing the seeds of of jealousy and dissatisfaction.
Sensex sans significant breadth and much hyped SEZs cannot stop suicides. A sense of complacency and too much reliance on the IT sector , gloating over comparatively younger India of tomorrow, and captive demand can demolish our growth dreams. And now the Real Estate with unbridled growth leading to oversupply are threatening to break or seriously dent the back of our banking system. The developer and the purchasers of propery must of necessity rely heavily on banks for funds. The supply side must be reined in to ensure smoother progress on the bumpy roads of reality. Yes, India shining has sores too and a lot many of them to let her enjoy a sound sleep until such time as these are cured.
Happy Ending
What we need to do is to speeed up the reform process and develop a system that distributes the gains of prosperity equitably and speedily. Also let us not allow ourselves to be overwhelmed by the euphoria of India shining. The progress has yet to achieve the critical mass for the process of development to become self sustaining. We need to keep our cool and move forward with steady but surer steps without lurching and faltering.
The eyes of world are watching us. Huge amount of world's pensioners money and money of orphans' and widows' across nations also has been expended in our resurrection and reconstruction. Let us not betray their trust. The vast hive of humanity that inhabits the subcontinent is looking up to those who lead the nation in business and politics with great hope for a happy future.
