Has Chidu played a clever ploy?

Readers will remember that he went abroad inviting FDI, and he did exactly opposite of that. Also, in the budget he gave a very confusing clarity on the Mauritius Treaty.

This made the market crash from around 5950 on the Nifty, to 5786 – almost 600 points on the Sensex, over 2 days. It spooked the FIIs, which started selling aggressively and so did other institutional investors.

Two days after the budget, he gave a TV interview of over half hour that the clarity he gave had nothing to do with FIIs, and they would not be affected, as long as they had Tax residency certificate, which can be easily obtained.

What this did was that the FIIs could now pick and choose and buy good shares, when the markets went down, because, before the budget the markets had gone up overall – both good or bad shares, due to the big promises made by the FM, and he also tinkered with fuel prices. So the FIIs have made a killing!

Now the markets are back to 5950 levels (Nifty).

The question that arises is - had he gone as a Congress fundraiser and had a secret deal with the FII?

Also, regarding the FDI, he has let loose the Taxman on many foreign companies and in case of Vodafone he said the Cabinet will decide. Is he again acting as a fundraiser by telling all Foreign Investors, who are keen to get into India because it’s a huge market for them, that, if you want FDI, come to Congress or UPA (another fundraising idea).

When FDI in aviation was liberalized, it was widely expected that the Jet-Etihad deal would happen within a week. But, clearly, Etihad has had reservations not only due to bad experience in the past, but also due to the mess in aviation, mainly because of high ATF prices, which has not yet been sorted out. Remember that ATF is high because high state taxes in Delhi and Mumbai, both of which are hubs for this sector, and both of them come under Congress ruled states.

Not only did Etihad call Anand Sharma (Commerce Minister and in the cabinet) to Abu Dhabi, for a clarification, but now they have also called our PM to Abu Dhabi for more clarifications. Either all this is wishy-washy, or then India is going with a begging bowl. The second is not right because as the UPA claims, we are still the 2^nd fastest growing economy in the world, after China.

Chidu has used his intelligence to show his loyalty to the big guns of Congress, because many say that he will be their PM candidate in the next elections. Rest assured that he will still try every trick in the book for his ambitions.

The other thing they did was to raise petrol prices twice within a week after the budget, by as much as Rs.1.50 each time, when oil companies are not losing on petrol, as crude prices have not gone up, in fact they have come down, internationally.

By this skewed differential in petrol and diesel prices (today the latter is cheaper by as much as Rs.30), they are killing the auto industry. Maruti has shut down its plants for 1 day, Tata Motors by as much as 10 days, and all auto companies are operating at 30% of their capacity.

They have killed the power sector, road sector, infrastructure sector, real estate sector, the FDI, the export sector, the telecom sector and now the auto sector. Are they committing hara-kiri, or do Chidu, Monteksingh and Manmohan Singh have a magic wand that they will spring a big surprise in the next elections.

What I feel will happen is that Chidu has Mulayam, Mayawati, DMK and now Nitish Kumar on his side and they will give out doles of thousands of crores to them and their states, and then hope to come back by muscle and money power. Only time will tell …