Reportedly, the indian economy is the victim of the narendra modi government's shock therapy in 2014, and conservative investors may think that it will take four quarters to rebound, and if the recovery comes earlier, Christopher Wood, global The head of equity strategy at Jefferies in his weekly note to investors and that said, his base case remains in the reforms, be it demonetisation, the introduction of the goods and services tax (GST) and the real estate regulation act (RERA) or the bankruptcy law, will prove long-term positive.
Wood said, “There is no doubt that the initial shock impact of these reforms on the economy was underestimated by the bharatiya janata party (BJP) government. Indeed, the indian economy, and its entrepreneurial classes, could be compared to a former drug addict going through 'cold turkey'. Formerly, the bank OF INDIA' target='_blank' title='reserve bank of india-Latest Updates, Photos, Videos are a click away, CLICK NOW'>reserve bank of india (RBI), too, acknowledged the economic challenge india is facing when it comes to its monetary policy and lowered its gross domestic market. product (GDP) growth projection for 2019-20 to 5% from the previous 6.1% forecast in october 2019. The second quarter (Q2) for GDP growth came in at 4.5 0%, the lowest in six years.
Wood said "The government will doubtless announce more supportive measures in the budget due on february 1, but hopes for income tax cuts have abated for now because of the perceived lack of fiscal spare. Apparentlu an estimated Rs 3 trillion of borrowing would imply a fiscal deficit of nearly 5 per cent of GDP this fiscal year. GREED & fear’s view, the lack of a rate cut is a reason to buy more long-term government paper".