Modi government and stock market: What lies ahead?

During the last four years of Modi government, the entire market cap of all Bombay Stock Exchange (BSE) went up by whopping 73% to Rs.145 lakh crore now from Rs.84 lakh crore as of May 2014. This is phenomenal considering the fact that the base of domestic market cap grew exponentially in this millennium – from a meagre around Rs.6 lakh crore in 2000 to over Rs.84 lakh crore in May 2014, a rise of over 14 folds!

Bold initiatives on economic reform front by the Modi government seem to have helped the capital markets to rise by such phenomenal levels by re-rating of overall market valuations. This bull phase in the market was not accompanied by any robust liquidity infusion from the FIIs, nor supported by strong earnings growth. While the previous UPA government period, the domestic equity markets attracted over Rs.4.80 lakh crore from the FIIs cumulatively, the same so far in this present government regime is around Rs.1.69 lakh crore, which is about 38% of what our markets received during the previous UPA regime (FY2010 to FY2014).

Opposition calls for Tamil Nadu 'bandh' over police killings

Opposition parties on Thursday called for a 'Tamil Nadu bandh' on Friday and sought the resignation of the "BJP's puppet government" in the state over the death of 13 people in police firing in protests against the Sterlite company in Thoothukudi.

DMK leader Kanimozhi accused the Modi government of remote-controlling the Tamil Nadu government and alleged that the Sterlite factory was able to thrive because of the support it received from the central and state governments.

It is important to know who ordered the police firing that killed 13 protesters in Thoothukudi town, the MP said.

The police action followed mass protests against the factory that locals say was depleting the water table in the region and also causing health hazards.

Thoothukudi's new Collector Sandeep Nanduri said that since the government had ordered an inquiry committee to probe the various incidents, it would be improper for him to comment on the issue.

After note ban, will Modi govt now ban cheque books for its digital push?

After deciding to revoke the legal tender of Rs 500 and Rs 1,000 currency notes in November last year, the Narendra Modi -led central government might now be working on another disruptive step to boost digital transactions — banning the cheque book. A senior functionary of the Confederation of All India Traders (CAIT) on November 16 said the Centre might withdraw the bank cheque book facility in the "near future" to encourage digital transactions.

CAIT Secretary General Praveen Khandelwal said the government needed to encourage the use of debit and credit cards. "In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions," he said.

Impact of cheque book facility withdrawal

Demonetisation was a big disruption for most Indians, right from poor labourers to big industrialists. Now, the withdrawal of the cheque book facility could have a massive impact as well. Most business transactions are conducted through cheques. According to experts, 95 per cent transactions currently take place via cash or cheques.

Since cash transactions have declined, transaction by cheque might have increased after demonetisation.

Use of cheque in India

Cheques are fairly popular in SME payments. By taking a PDC (post-dated cheque) against the delivery of goods, a supplier secures payments due in future from its customer. People pay by cheques while buying land and house, too.

Many landlords now take rent from tenants via cheque. Since November 8, 2016, digital payments like BHIM have grown. However, their sweet spot has been small-value payments (two to three figures). The retail and commercial payment usage strongly suggests that cheque is a very compelling method of payment for large-value payments (four figures and above).

Modi govt's cattle trade ban to halt $4 bn beef exports, lead to job losses

CATTLE TRADE BAN - The Indian government's ban on the trade of cattle for slaughter threatens $4 billion in annual beef exports and millions of jobs if the government does not revoke the stoppage decreed last week, according to two industry officials.

In the latest setback to the Muslim-dominated meat industry, Prime Minister Narendra Modi's government decreed animal markets will only be able to trade cattle for agricultural purposes such as ploughing and dairy production.

The ban is likely to further alienate Muslims, who make up 14 percent of India's 1.3 billion people, and raise communal and religious tensions. Hindu hardliners and cow vigilante groups have been increasingly asserting themselves since Modi's Hindu nationalist government came to power in 2014.

Most of India's beef comes from water buffalo rather than cows, which are considered holy by Hindus, but local cattle traders and slaughterhouses have repeatedly come under attacks from activist groups that oppose the meat trade.

"In the garb of the order that prohibits the trading of cattle at organised markets, the government has tried to impose a ban on the meat industry," Abdul Faheem Qureshi, head of the Muslim All India Jamiatul Quresh Action Committee, told Reuters.

"Meat supplies will very soon grind to a halt in India and abroad if either the government does not repeal this draconian order or a court does not step in," Qureshi said.

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