RaGa 1: NAMO 0
Prima facie, it appears that RaGa has stolen the thunder from NAMO after the brilliant success of the Congress party in the Hindi heartland of Madhya Pradesh, Rajasthan and Chhattisgarh.
The BJP’s performance in Telangana and Mizoram was also dismal.
According to experts, these results indicate two trends.
The first is that Prime Minister Narendra Modi’s charisma may be on the wane.
The second is that this may be the beginning of the end of the BJP’s winning spree.
Naturally, this has emboldened RaGa to adopt an aggressive stance with regard to the waiver of farm loans.
“The Congress party has managed to wake the CM’s of Assam & Gujarat from their deep slumber. PM is still asleep. We will wake him up too,” RaGa said in a belligerent tone.
The Congress party has managed to wake the CM's of Assam & Gujarat from their deep slumber.
PM is still asleep. We will wake him up too.
— Rahul Gandhi (@RahulGandhi) December 19, 2018
He also claimed that the waiver in three States was completed in a record two days.
It's done!
Rajasthan, Madhya Pradesh & Chhattisgarh have waived farm loans.
We asked for 10 days.
We did it in 2.
— Rahul Gandhi (@RahulGandhi) December 19, 2018
India braces for a surge in populist farm loan waiver schemes.
Read: https://t.co/tqh6mgGOIR pic.twitter.com/qre1Hrb0hJ
— BloombergQuint (@BloombergQuint) December 19, 2018
However, some experts and intellectuals were not impressed with RaGa’s move.
They claim that such populist measures are irresponsible and will torpedo the economy.
#FarmLoanWaiver #farmers #FarmLoanWaivers
1,72,000 crores farm loan waived off by various states since Apr 2017.Who is footing this bill? Is it not misuse of tax payers money? Implement MS Swaminathan's recommendations instead of taking political mileage by waiving off loans! pic.twitter.com/3oY3ZUQ4Ej— Shyam® (@shyam481) December 19, 2018
States are already bleeding from farm loan waivers and Rahul wants a double waiver, this time by the Centre. Is there no limit to his irresponsibility? Enter Rahul Gandhi, The Economic Saboteur https://t.co/S9Rn4q9YFg via @swarajyamag
— R Jagannathan (@TheJaggi) December 19, 2018
Farm loan waivers is a bad idea, direct cash transfers like in Rythu Bandhu scheme of Telangana is a much better way forward.. former chief economic adviser @arvindsubraman tells me on @IndiaToday tv. More at 9.30 Pm tonight
— Rajdeep Sardesai (@sardesairajdeep) December 19, 2018
We might be entering a dangerous new normal in Indian politics. Reckless spending, temporary solutions, populist measures instigated to win votes. Has farm loan waiver solved the Indian agriculture problem in 70 years that we expect it to do now? #2019Debate
— Pradeep Bhandari (@pradip103) December 19, 2018
Rahul Gandhi, The Economic Saboteur.
With his push for farm loan waivers, Rahul Gandhi is instigating farmers to end repayments. If this is not economic sabotage, what is? https://t.co/7AF6O0Tr2u via @swarajyamag— Prasanna Viswanathan (@prasannavishy) December 19, 2018
As farm loan waivers pile up, a reminder on how it impacts banks. First order Impact is fall in NPAs but over time NPAs tend to rise, shows this great Macquarie chart. pic.twitter.com/PMINBnImE5
— Ira Dugal (@dugalira) December 18, 2018
Its not a @INCIndia or @BJP4India thing.
The amount of farm loan waiver announced in #MadhyaPradesh is totally unsustainable given the GDP and revenues of that state.
It will mean a virtual halt of all development activity for the next 3 years.— sandip sabharwal (@sandipsabharwal) December 18, 2018
NAMO to counter by slashing GST on realty sector
According to Nayantara Rai, the ace investigative journalist with ET, NAMO and Arun Jaitley are preparing a plan to slash GST on the realty sector.
#EXCLUSIVE | Sources to @NayantaraRai: PMO, FinMin in favour of big ticket GST rate rejig to revive housing market. 2 proposals on reviving housing market may be placed before GST Council @GST_Council @PMOIndia @FinMinIndia #GST @askGST_GoI pic.twitter.com/45jxB9B3hh
— ET NOW (@ETNOWlive) December 19, 2018
Plans underway to boost the dead housing mkt with a GST rate cut
Proposal 1: cut gst from 12% to 8% & at par with affordable housing schemes like PMAY
Proposal 2: a bold one. To cut gst on all housing to 5% but no input tax credit https://t.co/r5aVz9d4q2— Nayantara Rai (@NayantaraRai) December 19, 2018
Bonanza coming for home buyers? PM @NarendraModi & FM @ArunJaitley in favour of cutting the 12% GST on housing to either 8% or a flat 5% with no input tax credit for builders. Read this #Exclusive by @NayantaraRaihttps://t.co/G96853EchC
— ET NOW (@ETNOWlive) December 19, 2018
Nayantara Rai rightly opined that NAMO’s proposal is with a view to woo the middle class and is likely to be implemented before the elections.
(Nayantara Rai with Rakesh Jhunjhunwala, the Badshah of Dalal Street, and Billionaire Mark Mobius)
Realty stocks will surge
It is quite obvious that the slashing of GST on the realty sector will revive the housing sector and send all realty stocks surging into orbit.
In fact, the high GST rates is one of the reasons for the entire realty sector to be in the doldrums.
The BusinessLine pointed out that in anticipation of the GST rejig, realty stocks soared today.
While the BSE Realty index jumped 3.11 per cent, the Nifty Realty index edged up 2.95 per cent.
Indiabulls Real Estate was the biggest gainer, surging 8.64 per cent to close at Rs 90.55 on the NSE, followed by DLF 7.55 per cent at Rs192.8 and Sunteck Realty 2.97 per cent at Rs 360.30.
(Dalal Street punters rejoicing)
Which are the best realty stocks to buy now?
Porinju Veliyath was amongst the first to foresee the revival of the realty sector.
In September 2018, he recommended two high-quality and fail-safe stocks, being Oberoi Realty and Godrej Properties (see Porinju Veliyath Recommends Mohnish Pabrai’s Fav Portfolio Stock).
Both stocks have high-quality management and also solid assets, brand & business model.
Oberoi Realty @ 410 & Godrej Properties @ 560, two well-corrected high-quality stocks in the sector with solid assets, brand & business model.
Discl: no vested interests, not holding— Porinju Veliyath (@porinju) September 24, 2018
Porinju’s timing was impeccable because Oberoi Realty has surged from Rs. 410 to Rs. 482 while Godrej Properties has surged from Rs. 560 to Rs. 682.
Mohnish Pabrai has also given convincing reasons why investing in realty stocks is a very sound proposition especially in land-starved cities like Mumbai.
Mohnish favourite realty stocks are Sunteck Realty, Oberoi Constructions and Kolte-Patil.
I enjoyed my interview with @Nigel__Dsouza for @CNBCTV18Live on drowning out noise in the market and investing in Mumbai real estate. Enjoy!https://t.co/riA3drYWES
— Mohnish Pabrai (@MohnishPabrai) October 30, 2018
Kolte-Patil Zindabad!
— Mohnish Pabrai (@MohnishPabrai) May 30, 2017
Conclusion
Prima facie, we ought to have already paid heed to the advice of Porinju Veliyath and Mohnish Pabrai and tucked into realty stocks. If we haven’t, we should do so ASAP before NAMO makes a formal announcement of the waiver!
Management Quality is first criteria for investing in a stock.,if there is one most most opaq sector in India, it is real estate.So better stick with stocks like Asian paints and HDFC etc to gain out of any spurt in housing sector,beware of Third Grade Kachra in which some big investors might be sitting on and looking to dump it to small investors. 90% of small investors will be better of investing through mutual funds specially in case of small and mid cap stocks.No recommendation but for discussion.
Modi has Derailed India and its economy with misgoverness, so I shall stick to FMCG,consimptiom and pvt banking.
I was really surprised by recent revelations on Sun Pharma. Not to talk about ICICI Bk, Axis, PNB, OMCs and LIC issues in 2018. These are large caps. We have CG/Auditor quitting Manpasand, Vakrangee, PCJ and several other mid to small caps.
Don’t ever take higher exposure to any single stock no matter how great the story was and will be. Stick to the right allocation with a thinking that any stock nosedives 90%, your portfolio will not suffer more than 5-10% loss max.
I fully agree ,earlier I used to have around 40 stocks in my portfolio, but by listening to Wizards of Stock market ,I reduced it to 20,but suddenly 2 stocks Yes Bank and DHFL misfired,and I have to completely exit DHFL and almost 2/ 3 of my Yes Bank holding has to be sold at rock bottom prices.Fortunately my rest of portfolio was extremely strong and even my Yes Bank buying was 1/10 of peak price of yes bank ,which could also balance DHFL loss.These two sticks hit my portfolio by 10%.Nw again I am increasing my portfolio to more no of stocks to avoid concentrated call in Indian stock market, Where any type of issue can come at any time.
I think Modi will not touch the GST rates. This is because farm loan waivers result in instant votes.
Tinkering with GST rates will not give him so much bang for the buck. A smarter way might have been to roll back LTCG on shares. This has resulted in zero earnings for the govt so far given that folks can also similarly book long term capital losses that couldn’t be booked earier. Such a rollback will also be a sentiment booster and not really cost the exchequer anything. 🙂
You are over expecting ,if expecting a act common sence from Modi Govt,think of some thing non sence,he may definitely do that.
hahaha..true