No makhan-chori this Janmashtami!
O’ naughty Krishna, stealing butter sure was fun,
With friends supporting, it was a pretty good run
But Mommy waited around the corner with a loving whack,
And then, came a time when all had to be given back
Just a day before Indians celebrated the birth of the natkhat & loving Lord Krishna, the Finance Ministry presented Indians with more than one reason to celebrate the day with even more enthusiasm.
The biggest announcement making headlines is the withdrawal of recently proposed colossal surcharge rates applicable on investments in equity/equity-oriented schemes. The proposed surcharge took tax burden up to as high as an effective 42.7% which was obviously received with an equally massive backlash by foreign portfolio investors by way of heavy-duty offloading of Indian equities.
After all, why keep churning milk if the government wants to take the butter away
However, now that sanity has prevailed and the government seems to be reflecting PM Modi’s pro-wealth creator stance, we believe foreign portfolio investors will re-enter the most robust emerging economy and continue riding the growth potential in-store.
Along with this, there have been a couple of announcements that reflect strongly on India’s potential to resolve ground-zero challenges and spur an economic turnaround.
However notably, amid global chaos, domestic investors reflected strong resilience and faith in the India growth story – absolutely ignoring the worrisome picture being painted by foreign portfolio investors.
Key takeaway for investors:
Amid a global rout, India is well-positioned and has enough strength to tide over headwinds. Attempts are being made to continue strengthening the economy through proactive measures and the fact that the government does not shy away from reversing decisions or taking tough fiscal calls to reflect a strong intent to reinvigorate the economy. Investors must capitalize on the situation to step up SIP amounts and benefit from cost-averaging at current levels.