The "Dream" Budget...

"Dream" is what makes a common man live in this world, a world full of unprecedented surprises…

I am an "aam aadmi" of this nation.

As a child I dream to get my basic education...
As an adult I dream to get a job and work for this country…
As a "old man" I would like to retire and live a comfortable life…

Everybody in this country has some or the other expectations including the very basic needs of the life. But isn't there a system which will make one realize at least some of these dreams...
I think the answer to this is lies in the one of the most important event in the economic and financial world .i.e. the "Union Budget".

What is the Budget?
Budget is a summary of intended expenditures along with proposals for how to meet them. It contains the government of India's revenue and expenditure for a particular fiscal year. It also provides guidelines for managing future investments and expenses.

What impact does the Budget have on the common man or the economy and what should we expect in Budget2008 ?
Well it almost impacts each and every one of us as well as every sector of the economy. However I would like to touch upon some of the key areas here:

Education:
I think education is a key to the success of any society. For a country with more than a billion population we have a great potential to become the knowledge capital of this world .However we still have lot of challenges around this. We are still struggling to increase the literacy rate in many of the states (currently at 65-70%) . The primary education is still a concern for a lot of children, most of which, are the victims to child labor. At each level the curriculum and syllabus is still a concern. The poor and the middle class still struggle to pay for the fees at various levels of education. “Brain Drain” is still a concern.

But I think converting these challenges into opportunities depend on how fast we adapt to the changing environment & implement the much needed educational reforms. The budget should address all these challenges.
The government should encourage primary education and should concentrate on making education reach to every child in this country. The govt. should also focus on improving the infrastructure of many of the govt. institutes and should implement policies/schemes so that the poor/middle class of this nation is able to get the quality education at all levels. IIT’s and IIM’s should be allowed to start multiple campuses anywhere in India with or without private partners who bring in finance and other expertise.

Increased expenditure towards education reforms has to be one of the key expectations from this budget. Ultimately the objective of the education is to replace an empty mind with an open one and make the society a better place to live.

Agriculture:
With the agriculture sector growing at rate around 3-4% it is still a laggard as compared to the other sectors of the economy. A large part of Indian population still derive their livelihood directly from agriculture. A success of an agriculture season is still defined by the monsoon . All this make us believe that agriculture does play an important role in the growth of the economy.To make it really count the govt. should focus on increasing the agricultural productivity ,increasing the rural credit for the farmers, encourage investments in the agriculture sector thereby making agriculture a cornerstone of the Indian economy.

Inflation & Growth:
The prices of essential commodities are sky rocketing and this is affecting the life of "aam aadmi".With inflation at 6% what really one can do ?
Just to mention few....I think keeping the demand in mind if we really focus on the supply side of the equation and try to address the deficiencies we will be able to manage inflation in much more effective way. Just to give an example if we improve the Public distribution system in place & encourage agriculture to meet the demand we can really manage the prices of essential commodities.
The Budget should aim at moderating the inflation without affecting growth of the economy ( just look at China which is growing at 11% with just under 2% inflation).

All in all I wish Mr. Chidambaram should put his thinking cap on and orchestrate a successful budget by taking necessary actions to meet the expectations .

At the end I hope that an "aam aadmi" of this nation should be able to live up to his dreams...

Note:The above blog is also available @ http://www.ibnlive.com/blogs/1500/contest/view.html

“Taare” zameen par...

Warning: Not for the faint hearted !!!!!!!!!!!!!!!!!!!!!

It was Tuesday morning ,10.00 am to be precise , a working day for the Indian markets and yet the NSE was not trading…Surprised !!!!!!!!!!
If you are a faint hearted this one is not for you. The Sensex hit the lower circuit(4th time in its history) in the early trade suspending BSE/NSE trades for an hour , thanks to the recession fears looming from the US economy on the back of swelling discouraging numbers on jobs, consumer spending and housing. It’s almost a universal crash. All the global indices have plunged into the sea of red in the past couple of trading sessions. The start of 2008 has seen sensex tumbling from 21k to 15k levels just within a matter of few trading sessions. Billions of rupees washed out in few days.

A question to ask here : As an investor what should one do?
Well as “History repeats for itself” are lots of lessons to learn here:

Don’t just buy . Invest & Engage yourself in the business.
Investing is not just buying and selling stocks. If you like some business don’t just buy , invest & engage yourself in the business. Follow the business, evaluate the performance and think as if you are having a stake in the business. This will not only help u in getting more information but will help you in making informed decisions. Remember that over the long term the returns on the investments are much more significant in value.

Always Stay rational in an irrational world.
Markets have seen the irrational exuberance in the past 6 months or so (which is not new to the markets). We have seen the Sensex making record highs in late 2007 almost every month. Paper stocks were getting valued beyond anyone’s imagination. The “rational” of the business was kept aside and the price was getting traded irrationally .Sentiments were driving the markets in some cases rather than the fundamentals. If you look at the history of the markets it has its own way of punishing such punters and when it does that you will just see the carnage on the streets as we have witnessed in the past sessions. However you will always find value in a bull/bear markets no matter what the scenario is . It’s just a matter of being patient and staying rational.

Evaluate before making commitments and always take informed and responsible decisions:
Risk comes into picture only when you don’t know what you are doing.
Today the world is a global village and its prudent to stay informed about the latest and greatest. Just look at the recent subprime crises & recession fears in US which triggered the meltdown of the global markets which makes us believe that the decoupling of individual markets is a difficult thing in reality. So it’s very important for us to get plugged-in to the global events.
Again numbers matters the most when making any investment decision. It’s very important to evaluate the business before making any commitments.
Remember that the information is the most key weapon in the stock market .The early you know the safer you will be with your decisions.

Remember that stock will eventually follow the business. It’s just a matter getting informed , being patient and staying rational at all times.

I hope the above information will help you in making better decisions
Happy Investing.

Thanks,
Nitin Mahalle

Disclaimer: The opinions /views present in the above blog do not reflect any personal interest and are purely based on the renowned thoughts.