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Bihar elections will no more be Jungle Raj Vs Good Governance

Bihar elections will no more be Jungle Raj Vs Good Governance

Nitish KumarBy Syed Ali Mujtaba

Bihar in recent memory has seen two themes running consecutively and that has been an electoral ‘kamdehnu’ or milking cow. First was Mandal vs Kamadal that kept RJD in power for a long time. The second was Jungle Raj vs good governance that kept JDU in power for a long time.

Elections are due in Bihar before November and there is a full scale preparation is going on in the state, even though the election commission has not announced the dates.

However, the upcoming election in November in Bihar will be probably the first election when any VS or a winning formula will not figure as prominently as earlier in Bihar.

There reports suggest that CM Nitish Kumar in his current tenure has not been up to the mark. His performance has fallen much below the people’s expectations.

Some complaints against the Bihar CM are; deteriorating law and order situation, weak grip over administration, lack of health infrastructure, Covid 19 being uncontrolled, migrant workers sufferings, no investment in Bihar besides others.

As the state elections are being held in Bihar, two other things heavily impinge upon the electoral fortunes of the Bihar CM. One is the annual floods in Bihar that causes colossal damage every year in the state and second is the COVID-19 situation which is worsening with each passing day in Bihar.

Bihar election will be held to test the Modi wave in India. It is being held amidst the pandemic that has a negative pull, and in the post Ram temple Bhoomi pujan phase that has a positive pull.

It means how much BJP is an asset or a liability to Nitish Kumar that will be on the test?  The simple logic is some 50 lakh workers who walked from different places of India to Bihar during lockdown will be tested? Whether they will vote against their sufferings architected by Modi or will they still swing the votes in favor of ‘JSR’ slogan.  In case of negative voter rumblings, where Nitish Babu will look for cover this time?

Given the situation in Bihar, will Nitish Kumar survive the electoral heat at a time when pandemic and floods are looming large over the state? Will he his image being a person who delivers good governance in 2020?

Nitish Kumar has two aces on his sleeves. One advantage he has is due to the state’s melting pot culture, where each caste is set on its own temperature to melt in Bihar. And here Nitish Babu has his hands on the pulse of Bihar’s caste arithmetic or electoral arithmetic which he can manage well.

The second ace is the disjointed opposition in Bihar. Rather there is no opposition in Bihar. There is a huge difference between Lalu’s RJD and Tejeswi’s RJD. Tejeswai has nothing to showcase as RJD’s achievements in the 2020 elections. The sheer campaigning that Lalu Prasad did in 2015 to swing the electorates is not possible in 2020 elections.

So these two factors can overwhelmingly favor the fortunes of Nitish Kumar. However, the fact remains that there is no decisive mandate that right now looks bright on the ground. Can more searchlights be thrown on it…

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Syed Ali Mujtaba is a journalist. He can be contacted at syedalimujtaba2007@gmail.com

Expect rate cut, don’t bet on BJP Bihar win: Shankar Sharma

Expect rate cut, don’t bet on BJP Bihar win: Shankar Sharma

Shankar Sharma, Vice Chairman & Joint Managing Director of First Global, (Photo Credit;livemint.com)

Shankar Sharma, Vice Chairman & Joint Managing Director of First Global, (Photo Credit;livemint.com)

By Vatsal Srivastava

Indian equities have been hammered over the last couple of months amidst global volatility arising out of the confusion around the US Fed hike, China recession fears as well as disappointment over domestic economic data.

Vatsal Srivastava from IANS spoke to Shankar Sharma, vice chairman and joint managing director of First Global, for his expectations from the upcoming RBI monetary policy announcement and the impact of the Bihar elections on the markets – as also to get his thoughts on the current global macro trends. Sharma is one of Dalal Street’s most respected voices and, more importantly, a man who has proved very accurate in calling major turns and inflection points in the markets over the years.

Q: We last spoke shortly prior to the budget session. You expected a short-term correction but were bullish on India for one reason alone: a sharp fall in interest rates. Do you think (RBI Governor) Raghuram Rajan has done enough in terms of monetary easing? What are your expectations for September 29 RBI meet?

A: My position remains the same: the sole reason to buy India is a view that rates will come down dramatically over the next two years. If that’s not your bet, then you should not be looking at India. If you are coming to India to buy growth, then it’s going to be a long wait. So India is a pure cost of capital trade. And I expect RBI to cut rates in the September 29 meet.

Q: How are you reading the domestic inflation dynamics currently? Do you attribute the fall in prices to the government’s policies or it is totally function of collapsing oil prices?  

A: It’s in part due to oil. But it’s also due to not raising minimum support prices (MSPs). I don’t think monetary policy has contributed much, if anything at all, to lower inflation. However, bear in mind that not raising MSP has had a major negative fallout by increasing rural misery massively.

Q: Which structural reform undertaken by the Modi government can help revive a cyclical recovery in India’s investment cycle?

A: If they start spending big time on infrastructure building, that will propel a cyclical recovery. However, that eventually may lead to over investment, as has happened elsewhere in the world. And that leads to a sharp increase in the debt/GDP (ratio), which the previous government managed to bring down substantially to 67 percent of GDP from 87 percent in 2004.

Q: Do you think the upcoming Bihar elections can set the tone for the Nifty? Does a clear BJP mandate in Bihar lead to a big rally?

A: If at all there is a rally, it won’t be worth buying. Think about it: whoever bought the May 14 (2014 general) election outcome rally, is still repenting. So why get so excited about a state verdict if it’s positive for the BJP.

Q: What are your thoughts on China? Can the dragon lead the world economy into a recession as many fear or do you still have faith in a potential bazooka Beijing stimulus?

A: China has no real bullets left to use to stimulate its economy. They spent it foolishly in 2008-9 in trying to keep up with the Joneses. That was the stupidest economic decision I have seen from any government in a long time. And everybody still kept saying the Chinese leadership had a plan! We now know better. The only bullet left is a bigger devaluation of the yuan, which I think will happen over the next year.

Q: The US Fed maintained status quo at its September meet. You think this decision was only a function of problems arising out of China and EMs or is the US Fed having a domestic growth scare as well?

A: The Fed is confused. I see no sign of inflation in the western world, so they were trying to be too cute in talking about a rate hike. I think markets will keep a gun to their head, and the Fed listens primary to the market.

Q: If US monetary normalisation works, we will be fine. But suppose it falters what next? What’s the next policy action by global central banks? Negative interest rates?  Helicopter drops? More fiscal stimulus? What’s your best guess?

Yeah,  more of the same. It’s almost comical how easy it is to predict what the Fed will do. Always has been, save for the surprise hike in 1994. Wall Street is Main Street as far as the Fed is concerned.

Q: Do you believe in the decoupling theory? Can India decouple? 

A: Why do we Indians believe India belongs to some other planet? We are just another market. And just another country. We are looking good right now because of a conservative policy stand by our policy makers. Period. But to expect India to decouple and run up while the rest of the world struggles is to expect the near impossible. That said, India will outperform the global bear market, but by falling less.

(Vatsal Srivastava is consulting editor with IANS. The views expressed are personal. He can be reached at vatsal.sriv@gmail.com)