Sensex zooms : will Manmohan Singh be able to save Indian economy?

29 June, 2012

Will Manmohan Singh be able to save the country from an obvious economic downturn? The answer is yet to come, but the PM has definitely started off well in his new additional role of finance minister.

AFTER PRANAB Mukherjee vacated the chair to run for the presidential election, Indian Prime Minister Manmohan Singh took upon himself the duty of managing the finances of the country. With high hopes pinned on him to do some magic and bring the country’s economy back from the verge of another recession, Singh manages to hold on to expectations on his first day.

In his first day itself he has managed to give high hopes to the investors and common men equally. Singh’s first announcement about the clarification on General Anti-Avoidance Rules (GAAR) has sent the stock index soaring. The Dalal Street was in an apprehensive mood since the issue had been taken up in budget 2012 by Pranab Mukherjee. But with Singh’s clarification it stands out that GAAR will not apply to taxpayer’s income. It comes as no surprise that the stock markets are seeing a rise even a day after the announcements.

The second in line were the common men who cheered when the petrol prices were slashed from Thursday midnight. While the prices reduced by INR 2.46/ litre in Delhi and INR 3.10/litre in Mumbai and in various other parts of the country, it varied in a similar range. Even though the estranged UPA ally Mamata Bannerjee scoffed at the move saying the government should have reduced it by more than INR 10 given that the international crude prices have fallen considerably, the common man welcomed and cheered the move across the country. However, whether Singh takes any decision on LPG and kerosene prices is a matter of speculation at the moment.

Singh has also indicated that there may be some relief in the entry load charged by the mutual fund distributors to the investors. The finance ministry has asked SEBI to look into the matter and consider whether the same can be implemented without putting the fund houses under too much pressure.

If start is any indicator of the reign, then Singh has already raised the hopes for the country’s turnaround. However, a lot is yet to be done to put Indian economy back on track. Till then all eyes stay glued to PMO’s office.