Summer means the cuckoos are here.

The Indian stock market is falling from dizzy heights. For months Indian stocks have been among the most expensive in the world, with fellows predicting that the Sensex will reach 50,000 in 3 years. We know that the Indian market is highly manipulated by a few big players with rampant insider trading and front running. After 2008 retail investors were wary of the stock market but recently they have been investing in the Indian market through mutual funds. So, when so called experts were talking about absurd numbers was it just a trick to entice retail investors into the market so that they could sell out? The Sensex is down around 1000 points in April, down to 27,011 from 30,000 on 4 March. Company earnings for the last quarter, ending on 31 March, are down 9.33%, sales are down by 14.12%. The growth during the early years of the Congress was based on a huge growth of black money from a succession of scams, on an explosion in real estate prices due to black money and on a massive fiscal stimulus through NREGA, farmer loan waiver and the Sixth Pay Commission. The new government, which took over in May last year, could not tell the truth about the state of bankrupt government finances because of fears of total collapse in the market and the value of the rupee. Before bringing in big reforms the government has to stabilise the economy through a series of changes in restrictive laws so we can attract foreign businesses to manufacture in India, but this the Congress is determined to stop by using its majority in the Rajya Sabha. Just as the Congress was borrowing to finance its deficit Indian companies were borrowing at a furious rate. Total corporate borrowing has reached Rs 35.6 trillion from Rs 3.9 trillion in 2003-04, which is 34% of GDP. Corporate debt is 57% of revenues. Even the IMF is expressing alarm when it says," Indian corporate entities are now among the more leveraged when compared with their emerging market peers..." To control the deficit the Congress increased taxes to painful levels, which has reduced demand. Companies are sitting on excess capacity as demand has fallen and, with the burden of excess debt, cannot invest in new projects. Banks are stressed by bad loans and are reluctant to lend. The landslide victory of the Aam Aadmi Party in Delhi and of the Trinamul Congress in Bengal must not make the BJP so desperate that they come out with idiotic policies. The suggestion of charging double for guaranteed supply of electricity is terrible. It will mean that electricity companies will divert power supply only to the rich and to politicians leaving the rest of us to swelter during long black outs. Even BJP supporters will vote against it. The economy is stuttering and the market is falling but even now we are being advised to invest in stocks. It is summer, so the cuckoos are here.