October 5, 2017

The TINA factor explained

To its credit, the current NDA government, unlike the paralysed UPA 2, is a functioning government. It cannot be accused of policy inaction. Many radical moves have been attempted, perhaps with good intent — and measured on a scale of sheer boldness, they are impressive. The problem is that many of these policies have been ill conceived, inadequately debated or pondered over and badly implemented. In that, the government can certainly be accused of having been trigger-happy. We are a nation of poor people, even a crusader needs to tread gently. Else you run the risk of trampling over people’s lives, livelihoods and aspirations.

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So, why does the government or the stock market not appear terribly perturbed? It is the “there is no alternative” or TINA factor. Modi knows that there is still no credible alternative to him for 2019, at least as yet. All debates between people disgruntled with the economic environment generally end with “then who else?”

In the stock market, the same TINA factor forces the hand of the Indian investor. Bank fixed deposit rates have collapsed and post taxes they barely beat inflation. Real estate has disillusioned investors and gold has lost its sheen. Investors are slowly realising that the stock market is the only route through which inflation-adjusted real returns can be created in the long term. It is no surprise...

Read more at http://indianexpress.com/article/opinion/columns/indian-economy-nda-government-pm-narendra-modi-lulled-by-tina-4873135

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