Though election manifestos of all political parties look to be equally packed with noble intentions, market players seem to be more than willing to go for the Bharatiya Janata Party (BJP).
Most leading marketmen found BJP’s “economic stimulus package” much more appealing than that of the Congress. Though the manifestos of both the Congress and the BJP are silent on specific steps for the capital market, a majority of Dalal Street players felt that the former’s document was directed more towards reservation and lacked initiatives to ramp up economic growth.
“The BJP document sounds more practical. It has something for everybody and will have a positive impact on the stock market,” said D D Sharma, Senior Vice-President Equity, Anand Rathi Securities.
Manish Sonthalia, Fund Manager at Motilal Oswal Financial Services, said that the BJP manifesto was more appealing as it specifically spelt out its agenda, while the Congress’ was vague. “What the BJP has said is manageable. If one goes by its track record, the BJP will divest stake in public sector undertakings (PSUs) to manage capital account inflows. If the BJP manages to bring back the estimated $1.5 trillion from Swiss Bank, it will boost Indian stocks,” he said.
Most of them, however, opposed the party’s plan to ban foreign direct investment (FDI) in retail and impose countervailing restrictions on foreign entities operating in India.
Ambareesh Baliga, Head of Research at Karvy Stock Broking, said the move to bring the black money back to India would help the economy, but the question was how to implement the scheme.
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On the party’s FDI proposal, he said, “Banning FDI in retail would be a retrograde step as this segment has been one of the biggest employment generators in the past three-to-four years.”
Some market players said that the BJP’s move to increase the tax exemption limit and bring down home loan rates would be a huge positive for the markets than the Congress’ promise of bringing in quota for women and weaker sections of the society in private sector firms, Parliament and government jobs.
Jigar Walia, Senior Analyst at Parag Parikh Financial Services, said the BJP scored on concrete policy measures. The only problem, he said, was the party’s tendency to go overboard on issues like secularism.
Some others felt the earlier BJP-led government was friendlier towards the capital markets. “This time too, the party has made the right noises like tax benefits to the middle-class, abolition of fringe benefit tax and creating jobs in the IT sector,” said Angel Stock Broking Managing Director (MD) Dinesh Thakkar.
| lotus SCORES over the hand | ||
| Up to 35 kg rice/wheat for the poor at Rs 2 per kg | Up to 25 kg rice/wheat for the poor at Rs 3 per kg | Both will have adverse impact on govt finances |
| Free bicycles to school girls from BPL families and reservations based on economic conditions | Free education for students up to university level and tuition fee assistance to SC/ST students | BJP proposals are more practical; Congress is singing the same old tune |
| No fringe benefit tax, waiver of all farm loans and abolition of Central Sales Tax | Social security for the physically challenged, the elderly and the urban homeless population | Support the BJP, though proposals’ implementation will impact fiscal deficit |
| Home loans up to Rs 10 lakh to be made cheaper; no tax on salaries up to Rs 3 lakh | Silent on interest rate on home loans and income tax exemptions | Support the BJP, though the proposals, if implemented, will worsen govt finances |
| To ban foreign direct investment in retail | To maintain government control in state-run firms | Strongly oppose the BJP’s FDI-ban plan |
| To provide agricultural loans at 4%, computers at cheaper rate | To implement Rashtriya Swasthya Bima Yojana | Both get support, but the BJP plan sounds more practical |
| To bring back the black money deposited in Swiss banks | No such promise | Support the BJP proposal |
The Congress manifesto, on the other hand, found few takers. “It’s quite a lame document. There is nothing new in what the party promises,” said Deven Choksey, MD, KR Choksey.
He, however, felt while the BJP agenda looked attractive, the big question was whether the new government would have the financial wherewithal to implement the promises.