The FM should woo domestic savers, not FIIs and markets

Abstract

Our FM is wooing the wrong investors - the stock markets and foreign investors. Instead of wasting his time in Frankfurt and Tokyo, he should focus on Indian housewives and help them balance their budgets by reducing inflation and the fiscal deficit. The sharp gyrations of the stock markets on Friday after the Infosys results will confirm a commonly-held myth that markets reflect underlying economic reality. Most Indian experts tend to believe that what applies to the New York Stock Exchange and its relationship with the US economy automatically applies to our stock market and the Indian economy.

Put another way, we tend to believe that the stock market reflects the state of the Indian economy. This is why the finance ministry goes out of its way to woo the market in the hope that if the market is happy, the economy will be too.

Let us look at some of the assumptions regarding our market and check how true they really are. Read more at: https://www.firstpost.com/business/the-fm-should-woo-domestic-savers-not-fiis-and-markets-697673.html