The last Friday of June, 2012 happened to bring in lot of cheers on the finacial front, after a long time, especially after the PM took charge of the finance ministry at the Centre. Are the happy days back again for the Indian economy. Seems yes.
The Indian stock markets have been registeing gains ever since Pranab Mukherjee resigned as the Finance Minister. Both the Sensex and Nifty rose handsomely on Friday to register their highest gains this year.The Sensex rose by a whooping 439 points or 2.53%, to close at 17429 at the BSE. equally the Nifty rose by 129points or 3.1%, to close at 4278 points at the NSE. It culminated in the indexes rising for four straight days.
The fillip was provided by the late night announcement on Thursday by the finance ministry of the draft of the General Anti-Avoidance Rules (GAAR). The upgrading of India from "underweight" to "equal weight" status by Morgan Stanley and the positive news from Europe regarding better fiscal management by EU leaders led to boosting the bullish sentiment on the stock markets.
The rupee also rose handsomely against the dollar. It gained 119 paise, supposed to be its second largest gain in a decade, to close at Rs 55.61 a dollar. It was because of healthy foreign capital inflows into the country, thereby improving the dollar supplies.
The exit of Pranab Mukherjee, has acted as the lifting of a cap on the Indian economy. He represents the old school of Indian politicians, who prefered controls to growth in the economy. They believed in continuous regulation of
His exit has once again, given oppurtunity to Manmohan Singh to introduce long awaited reforms and reaccelerate the Indian economy. It is a good sign that the government is going for a clean break from Pranab's polcies. The PM's call for reviving the animal spirits in the economy is a telling statement on the handling of the economy by Pranab.
The imposing presence of Pranab, UPA's legendary problem solver, was coming in way of PM Manmohan Singh asserting himself, even as they differed on many vital fiscal issues like the retrospective tax on Vodafone. The political Pranab was clearly dominating the apolitical Manmohan Singh. In the process, Pranab's mishandling of the economy was going unnoticed and the reformist Singh was not only, not getting a chance to reform the economy, but was at the receiving end of the crticism, especially by the BJP, who pointedly called him an economist PM.
It now remains to be seen, how successful will the PM be, in reviving the Indian economy. The hopes of millions of Indians rest on his vision and ability to usher in a boost in the economy as was done in 1991-92,when he was the finance minister.
Let the happy days return back in the Indian economy.