Mumbai Diary
Man gives himself 6/10, markets give C-plus
From Anil Nair
The Prime Minister has been liberally handing out marks to his government and its various ministries during its one-year celebrations. He gave himself 6 out of 10, and for good measure he added that he was not very happy with the achievement. But people in Mumbai do not take such a magnanimous view. The stock markets have been range-bound ever since the new government came to power. The ?feel good? factor has completely disappeared and the cost of retail goods has made life miserable in the cities. The financial institution honchos and bankers cavil the tepidity in markets ? be it housing, stocks or commodities. According to one banker, the fall in steel prices, for instance, when infrastructure development is ostensibly a thrust area of the government only reveals how hollow the government claim is. But the best remark on the government'sperformance came from the foremost international rating agency Moody'sInvestor Service. Its vice-president Kristin Lindow has been quoted in the press as saying that she would give Dr Manmohan Singh'sgovernment C+ grade! Why? ??The inability to make substantive progress on cutting deficit is disappointing, since such restraint would ensure that the growth reaches a high level enough to redress the socio-economic limitations, while leaving enough manoeuverability for the government to fulfil its responsibilities.??
Evicting Bihari hawkers
Eviction of hawkers has become a regular news item in Mumbai. Mumbai municipal authority ? the BMC has so far evicted lakhs of hawkers from the streets of Mumbai, the latest one at Malad station. But not surprisingly the hawkers who are driven away are mostly Biharis and UP bhaiyas. While the Maharashtrian hawkers at places like Dadar station are left untouched. In the evening the Phool Market in west Dadar witnesses the largest congregation of hawkers in Mumbai. Yet no action is taken against them by the BMC. Even if the police manage to drive them away, within hours the hawkers with their huge awnings are back restricting not only pedestrians but blocking all vehicular traffic. The BMC also build a flyover over the illegal market only to keep the hawkers happy. The recent eviction started just after last Assembly elections in which the Sena lost all the seats in Mumbai. Political observers say it does not take much to come to the conclusion that BMC, which is controlled by the Sena corporators, is only taking revenge on the north Indians who have decidedly voted against the Sena and the Biharis are now paying a price for it.
Dance barred
Dance bars in the state have been banned, according to the ordinance issued by the state government. The notification will be issued by next Wednesday. But the media, especially the English one, have all protested against it with rigour. The argument are as specious as ??the ban will push bar dancers into prostitution??, even while they aver that the dancers were just doing a decent job. The counter argument is that when people are sacked from banks or BPOs do they join prostitution? Then why this hard feeling for bar dancers. Further, the government also suspects that the dancers hail from Bangladesh causing a security threat. But the move has been hugely popular with the common people. Several women NGOs recently held a protest rally asking why there was a delay in introducing the ban. The ban on dance bars was originally mooted by BJP-Sena when they were in power. As they say, imitation is the best form of flattery.
Black Monday'smanipulation
So, after one year, Union Finance Minister Pallaniapan Chidamabaram finds a FII responsible for the meltdown of stocks on May 17, 2004. The findings are ridiculous. Can one FII single-handedly cause a 600-point fall in Sensex. But don'tjump to that conclusion. The SEBI finding against UBS (a foreign investment company) is that it did not cooperate with the regulator in the investigation of the Black Monday'sslump. SEBI did not find anything against the FII which could be termed as price rigging which resulted in a 600-point intra-day fall in the Sensex. The fact is that the markets fell when investors knew that Leftists are going to rule the country. They panicked when Left leaders made utterly irresponsible statements like ??disinvestment ministry gaya bhad mein??. Investors are not going to cheer a government that is so retrograde in its thinking. And investors are also not blind, they know what has happened to Kerala and West Bengal after decades of Leftist rule. The Sensex dipped to 4700-mark on May 17 and now it is about to touch 6000. But don'tthink that the spurt in Sensex after the new government came to power is because investors are happy with its policies. The price to earnings ratio of Sensex on May 17, 2004 was 14.83 and today it is about 14.96. The current boom in the markets is only because of the earnings growth and not because of any feel-good factor which was so prevalent during the NDA rule. If the stock markets had fallen on May 17, 2004 because of price rigging by manipulators then we should have witnessed a marked improvement in the P/E ratio today. All the time we knew that the ?Black Monday? was a legitimate event caused by investor sentiment, now after the Finance Minister'sred herring, it is confirmed.
Power trips
With the latest weather forecast stating that the rains will be delayed by a week, the corporate world in Mumbai is agog with the news of a veritable exodus of industry from Maharashtra. To make matters worse, Chief Minister of Maharashtra Vilasrao Deshmukh recently said that the state would face power shortages for many years to come. Some of the companies have even set up consultancy teams to study comparative availability of resources for their factories in neighbouring states. The first among equals is Gujarat, which, much to Deshmukh'schagrin, launched a media blitz to tom-tom its three phase uninterrupted power supply in industrial areas in Gujarat. Now MSEB has confirmed that it will bring Thane industrial areas including Rabale into the load shedding protocol which has over a hundred major factories including that of IPCL.
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