When the Narendra Modi-led BJP/NDA alliance was returned to power in New Delhi for a second term with a greater majority in General Election 2019, the general expectation was that the economy was set to experience a prolonged boom. Yet as the newly elected government’s first 100 days in office milestone is about to be crossed, the economy is showing signs of entering into a prolonged slump, if not recession.
The plain truth is that the BJP has lost its ideological compass. Its parent party, the Jan Sangh, was unapologetically pro-business and private enterprise — ideologically the polar opposite of the Congress which entrusted the savings of the newly-liberated people of independent India to an army of incompetent and venal clerks in public sector enterprises — including nationalised banks — who have ruined the Indian economy. Instead of following the pro-business and private enterprise ideology of the Jan Sangh and Swatantra Party which would have fired the slow engines of the economy, the Modi government has become an ideological clone of the Congress. On May 23, when the verdict of the electorate was declared and the BJP/NDA government was returned to power at the Centre, the Sensex of the Bombay Stock Exchange hit a high of 40,267 on June 3. Since then, it plunged to 37,118 wiping out Rs.15 lakh crore of investor wealth.
According to the country’s jholawalas and faux left intellectuals who mysteriously continue to dominate the public discourse, the stock exchanges are gambling dens of filthy capitalists and running dogs. But this viewpoint is foolish. Essentially, stock exchanges serve the very important purpose of canalising savings of prudent hardworking citizens into corporate enterprises which produce goods and services people need, and generate mass employment. The current carnage in the stock market in which even bluest blue-chip equities are being off-loaded by investors — your correspondent who prides himself on his investment acumen has suffered a 10 percent loss on lifetime savings (Rs.14 lakh) invested in 2015 — signals a complete loss of confidence in the BJP/NDA 2.0 government. Since 2014, over 25,000 dollar millionaires have migrated from the world’s biggest market to foreign shores. Connect the dots!