Event

　　The debate about “Acche din” (Good Days) continues to rage: “Truereform requires transparency in and demystification of process. It alsorestricts discretion or the power to make exceptions.” So says Prof ShreekantSambrani. The question is whether the Modi government has beentransformational in its approach or is just tinkering Can the slow take-off ofthe economy be blamed on the pains of the reform process We think theauction process for natural resources, the financial inclusion scheme, thebankruptcy bill and turnaround of railways could qualify as reforms. GST isone of the important reforms, which is awaited. Also more needs to be doneon PSU banks, farm productivity and land reforms.

　　Impact

　　Business (7/10) – choosing long term over short term: Unlike past, thisgovernment has not chosen to dole out fiscal incentives to kick start growthbut has chosen the difficult path of providing a conducive environment forbusiness to grow. The focus on ease of doing business, Make in India, roadsand railway Infrastructure and GST are steps in the right direction. However,the fallout is that near-term growth has been tepid, as businesses repair theirstretched balance sheets, adjust to new ways of doing business, such asauction of resources, and await improvement in demand.

　　Agriculture (5/10) – more lip service than intent: In its effort to shrug the“Suit boot ki Sarkar” tag (a government for the well-heeled), this year’s budgetwas devoted to agriculture and rural India. However a closer look reveals thatthe sharp jump in allocation is a mere reclassification of amount. Whileacknowledging that irrigation is a focus area, its flagship programmes (egPMKSY) have fallen short of real impetus. MNREGA has made a comebackin view of drought.

　　Social (9/10) – smart welfare the master stroke: The ‘JAM’ trinity has beenthe highlight of this government. This is a combination of bank accounts,unique identification number and mobile numbers to directly transfer financialbenefits to the needy population. A record 216.8m bank accounts have beenopened, and US$9.2bn distributed to 300m needy. About US$4bn were savedby weeding out duplicate and bogus accounts. The scheme is to be extendedto important and large subsidies under food and fertilizer.

　　Foreign (9/10) – improving relations, attracting investments: The PM hasdrawn global attention to India. Perhaps a big achievement has been furtherthawing of relations with the US, China and the focus on the South East Asianregion. FDI jumped by 27% to an all time high in FY16 as a result of strongand positive outlook generated by these visits of the Prime Minister.

　　Outlook

　　Market in consolidation mode: Post a sharp rally of 4% in last 1 month,market is taking a breather. Sector rotation is evident as market seekssupport. Monsoon is making steady progress till now and few drops inMumbai will be enough to push market out of the tight range it is stuck in.