And for a Friday amidst crazy poll freebies promises and Global economic uncertainty and volatility, some thoughts….. some musings…..
With election dates announced in two states, Politicians are busy promising freebies, inaugurating Projects and appeasing different sectors of voters, motto – keeping the poor as poor. Of serious long term consequences is the promises on Govt jobs and the already untenable huge budget deficits by increasing salaries and pensions to Govt. employees. Most people are unaware that, constrained by budget deficits, the Central Govt had declared all Govt employees joining from Jan 2004 would be on a defined contribution thru NPS ( National Pension Scheme). The employee contributes 10% and Govt equal amount, later raised to 14%. Union Govt and 29 States have adopted the NPS. The Trust manages investments to create yields and offer Pensions as per each person’s appetite for investment and risk. Now politicians are on the appeasement game, promising to go back to the OPS (Old Pension Scheme), wherein the Retiree gets guaranteed 50% of last pay plus DA plus periodic inflation adjustments. All state Govts are hugely in deficit. No one has any idea where the funds will come from. There are about 68 Mn Pensioners and more than 200 million Govt Employess who will become Pensioners. The country just cannot afford. Nation needs more Governance and less of Government. Hence productivity, efficiency and accountability have to be ingrained into Govt service and there is no case to guarantee OPS security to a small percentage of the population. Let every citizen in the country compete and save to grow the economy.
Whether you believe in it or not, Indian stock markets are amongst the oldest, longest thriving and in today’s digitalised world among the most efficient and well managed exchanges in the world. Trade settlements are on T+1 and T+2 days. Even In US, UK and Germany, the markets are not as as efficient. Every middle class Indian must have a stake in the Equity Market. Traditional Indian investments in Gold, FDs and Real Estate are not going to match the ROI of the Indian Stock Market. For those who are completely novice, best to start a monthly SIP with a good Bank for a Balanced Mutual fund or a Nifty ETF.
Let every Indian realise the route to a Developed Nation is to grow the Indian Economy, to 5Trn $s in next three years and 20Trn $s in the following decade, the entrepreneurial way, the inclusive way, the SEEGOS way.