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• The Government is striving to maintain a balance between Fiscal prudence and Fiscal stimulus to avoid credit downgrades, So, Monetary policy measures are preferred more than Fiscal policy measures and that is what 20 trillion package is more structural and long term in nature. Rs 8.5 tillion liquidity pumped by RBI, by way of 150 bps of rate cut. There is more room for RBI to pump the economy via Monetary policy measures. But the Credit growth in Indian economy has decreased from Rs 11 trillion in FY 19 to Rs 6.5 trillion in FY 20. This is because, onus is on the borrowers and there is a need for borrower responsibility. (A defaulter had spent Rs 400 crore on daughters wedding recently. Compare this with before independence, during world war II, example of Tata Steel when it had difficulty in paying salaries to their staff and the promoters mortgaged their personal family jewelleries and put the money in the company. They put their private money in a public company. While borrowers now take out public money from their companies for private use. Cheque bounce cases close to around 4 crores in India. This is the reason banks are reluctant to lend. The government needs to create an equilibrium between the banks and the borrowers here.

• India has a very good opportunity to attract FDI given the distressful wave against China. By supplying medicines to the world, India has created a massive goodwill. During Y2K we became “Backoffice of the World”, now we have a chance to become “Manufacturer of the World”.

• Do not expect equity fund manager to take cash calls. His sole job is only to outperform the respective benchmark. Long only products have a mandate to remain fully invested at all points of time, irrespective of rise in valuations and rise in uncertainty. It is investor, who must first diligently do asset allocation & stick to it, and then select products appropriately. There are products like asset allocation and balance advantage, but people hesitate to invest in them due to low returns in them during bullish phase of markets. Investors expect high returns, but one should not expect only upside of equities and not the downside risks associated with it.

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