Most of my readers, like me, would probably answer ‘Equities’ to the question in the title. Like me, you would be surprised that the answer is ‘Political funds’. This was revealed in an analysis by the Association for Democratic Reforms. In the 10 years to 2015-16, assets of the BJP grew 627 per cent, of the Congress 353 per cent, as compared to the 177 per cent increase in the Sensex. Therein lies the tale.

If the primary objective of political leaders is self aggrandisement and the welfare of the people then the India story is not an exciting one. Evidence of this is the growth, as above, in assets of all political parties, the slowness with which politicians of other parties are proceeded against, despite damning evidence (mutual back-scratching), the alliances, for electoral reasons, with people of dubious backgrounds, the diktat of the Maharashtra Government to make banks (instead of the State) pay for loan waivers (a political decision) and the fact that Parliamentarians are served food at subsidised costs far lower than available for BPL citizens.

If, however, the welfare of the people is of primary concern for good governance, India is an exciting growth story. The room is being cleaned after 70 years of dirt being shoved under the carpet. The main cause of non-performing assets of banks (public sector banks have a 70 per cent market share and are controlled by the government, the majority owner) caused by loans directed to be given to crony capitalists.

The government has compelled large defaulters to be taken into bankruptcy proceedings, and the largest ever sale of corporate assets is taking place to reduce corporate debt. A recapitalisation package was announced for banks which will enable them to meet demand for credit.

Elbow room

Tax collections are high; ₹92,000 crore was collected through GST in September alone. Fall in crude oil prices (Brent is around $58/billion) has helped bring down the current account deficit from over 4 per cent to under 1 per cent and helped stabilise the currency. Forex reserves of over $400 billion gives the government the financial elbow room to do things.

A study by Pew Research concludes that Indians are, of all countries, most satisfied with democracy (79 per cent satisfied, 11 per cent dissatisfied while in the US it is 46:51). So, the government’s latitude to demonstrate its concern for the people overrides the interests of the polity.

Anil Agarwal of Vedanta group, in a recent interview, said the government should sell its idle assets in companies such as ONGC and Coal India. He is right. The group took over Hindustan Zinc when it was a loss making PSU and it is now a profitable business and the second-largest zinc producer in the world. Not all privatisations are as successful but it’s like this; instead of continually nurturing a loss-making entity ( such as Air India) with tax payer money, it is better to take a chance with privatisation in order to put the assets to more effective use.

Good governance calls for focussing on the welfare of the people and addressing their grievances. Winning elections should be on the basis of good governance and not on inducting those with dubious history into the party because of the vote bank they bring.

(The writer is India Head — Finance Asia/Haymarket. The views are personal.)

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