My exact views published in Zee News article about Indian Economic Situation..

30th March 2014
My article:
http://viditviews.blogspot.in/2014/03/indian-economy-in-last-eight-months.html

1st April 2014
source: 
http://zeenews.india.com/business/news/finance/rajan-warns-of-turmoil-in-markets-if-polls-deliver-unstable-govt_97152.html


Mumbai: Reserve Bank Governor Raghuram Rajan on Tuesday said the markets have built up high hopes of the elections delivering a stable Government, but cautioned against "some turmoil" in the equity, and perhaps the bond and forex markets, if an unstable dispensation comes to power.

"The issue is that the markets right now are anticipating a stable Government and rapid policy actions. To the extent markets are disappointed, it will reflect on stock markets, perhaps on bond markets, perhaps on exchange markets. We have to be prepared for some turmoil," he said, speaking at the customary post-policy press conference.

It can be noted that the equity markets have rallied by over 6 percent during March, as expectations of a stable and pro-business Government are getting built up. The rupee has also risen during the period and is now trading below the crucial Rs 60 against the dollar mark.

Rajan, the academician-turned-central banker, added that he believes that even in the case of an unstable Government, there will be positive re-assessment by the investors so long as the Government addresses concern over the economy and the fiscal management.

"Even if the Government is not necessarily a stable one, provided any new structure shows the appropriate concerns about the economy, about the fiscal and so on, I would suspect that after an initial bout of turmoil, there might be a re-assessment which will be more positive," he said.

The RBI will wait and watch the situation, Rajan said, adding that the real solution for insulating against such issues in the future lies in strengthening the balance sheet of the country.

Indian Economy in last Eight months

It was the month of August 2013.
The news headlines screamed loudly about Indian economic crisis.
Some even compared it to 1991 crisis when India had to airlift its gold reserves as a pledge with the International Monetary Fund(IMF) for a loan.
The Indian Prime Minister, a well known economist, Mr. Manmohan Singh opened his mouth to assure the people that India of 2013 is not that of 1991.
Still, the rupee hit record lows every day.
The foreign investors pulled out their money out of Indian markets.
The faith in the Indian economy also plunged to a record low.

Now, look at the current scenario. The rupee has crossed Rs.60 mark, a psychological barrier despite the several attempts by RBI to keep it under control.
The foreign Investors are pumping their money in the Indian markets with enormous pace. The share markets are at record high.

Is it the symbol of renewed faith in the Indian market??
Or, Is it the bubble waiting to burst????

The market is laden with euphoria of an investment friendly stable government at the centre.
But what if the Indian people give the fractured mandate?
What will happen on 16th May in market when the election results are out?

It seems that RBI is already preparing for the worst. RBI has been seen buying dollars in the last few days.
The Indian foreign reserves may touch $300 billion any moment.
The way Raghuram Rajan, RBI governor, has brought back the confidence in Indian market is really commendable.
The import reduction in gold has been highly instrumental in bringing down Indian CAD(Current Account Deficit).
As, It is rightly said "Tough times requires tough measures".
After two months,it will be the right time to bring out some tough economic reforms in India.
Reforms that could bring back the pace of growth which we lost in previous government.

Lets, hope the next government remains stable for the five years and India proceeds towards the aim of being economic superpower.