A major part of the results of Election 2019 is clear but still a lot is pending now at the time of going to print. The foregone conclusion is that Narendra Damodardas Modi is all set for a second term. The victory of the Bharatiya Janata Party (BJP) may have astounded a lot of people in this country who had been saying that actions such as Demonetisation followed promptly by the imposition of the Goods and Services Tax (GST) and many other economic steps had hit the average Indian, especially the small and medium entrepreneurs those who are in industry or trade. The general talk was that India may once again revert to a climate of a mixed political situation. Many pundits claimed that a BJP victory is imminent while some others, quoting Kanshi Ram, the founder of Bahujan Samaj Party, said that a confused mandate will always help safeguard democracy. While some of the vociferous pro Modi elements had lately fallen silent due to apprehensions, many new voters came up with unequivocal support for him.
What is interesting is not the political outcome of the elections but more the money market reaction to the results. While the BSE Sensex surged over 1,000 points Thursday to touch the 40,000-mark for the first time ever following the BJP’s thumping electoral show, the broader NSE Nifty crossed the historic 12,000-level after early trends gave the BJP a comfortable majority in the Lok Sabha. That which attracts attention is not the surge in both the Sensex and Nifty but how both succumbed towards the fag end of the session. Money markets, no doubt, are no child’s play across the globe. Those who understand it are lucky while those who do not are somewhat doomed in their ignorance. However, as a common citizen, one cannot but wonder at the volatility of the money market and its curious play at such times. It can easily be understood that a war-like situation would definitely affect business and investments and therefore the money markets. The same cannot or should not be presumed for election results getting declared in a democratic country. While some claim that stock market wealth grew by Rs 75 lakh crore since the Modi led government won polls in 2014 with the benchmark Sensex gaining 61 per cent during that period, the common citizen, most likely, has not had the good fortune to get even a whiff of this tremendous amount of wealth. Captains of India Inc have gone on to hail Modi’s return and expect bold reforms in NDA Ver. 2.0. Some of these bigwigs of the business world claim the results showed that ‘NDA 1.0 succeeded in formulating a five year strategy which has been well appreciated by the country’. This opinion is obviously based on the election outcome. However, one has to take into account various issues such as the Balakot air strike and a general impression that Modi is the only person capable of hammering Pakistan and ‘protecting’ the nation that have certainly affected the poll outcome. Even the use of the word Chowkidar by the Prime Minister himself, followed by a lot of other people from his party, gave a message of strength which obviously was not the image that any of the leaders of the fragmented Opposition parties could put up. In a nation where the people want ‘someone else’ to do everything for them, a person with strength is an entity appreciated for any kind of action. This image of having the capability to retaliate is something that may not be appreciated by those who understand the need for social balance. But the common Indian who feels totally helpless against forces that overrun her senses mostly needs that kind of an assurance. All of us wish to be bullies.
Economy, however, has to be based on much broader foundations that should withstand political turmoil. The prime reason for the critical components of the Indian economy getting shaken up because of political events is not difficult to understand. All the players in the Indian money market depend on the shining abilities of the Corporates and their honchos who can successfully manipulate the government and milk the taxpayers’ money for their own benefits. Since the common citizen is incapable of comprehending intricate and devious operations of the financial markets, the behavior of the Sensex and Nifty on 23 May 2019 is but just an indication of where India will be headed during the coming years.
