The Modi premium

Economic growth, which we are taking for granted, slows for a completely different set of local or global factors and the Modi premium vanishes

Last week I was chatting with a retired banker who has his savings invested largely in stocks. Like many thoughtful people hoping to see a just and equitable society he was concerned about “what’s going on in the country”. 

He wants a change for the better. Then, he hastened to add with a tinge of alarm, “Of course if (Narendra) Modi does not come back to power, I am sure 20 per cent of my portfolio will be wiped out.” The Indian stock markets are carrying what can be called a Modi premium. Last Friday, the markets jumped to an all-time