Sunday, July 13, 2014

India's budget disappointment: Jaitley takes a cautious approach

(13 July 2014) India's Finance Minister Arun Jaitley delivered a much-anticipated budget last week as the incoming NDA government made its first significant mark on the post-election political landscape.  The budget was met with considerable criticism from many quarters, however, as Jaitley left in place the current tax regime as well as the thorny issue of subsidy rationalization, preferring to defer it to some future date.  Most measures taken were seen as too cautious by most in the business community as many wondered if the ambitious 4.1% deficit target was realistic given the fairly lethargic economy.   Indian stocks declined on the budget news as investors reflected on commitment of the government for serious economic reforms.  Clearly, FM Jaitley and PM Modi are trying to steer a middle path that appeals both to business and the wider population.

This early stumble for the newly minted NDA administration is seen through the current affliction to the horoscope of the swearing-in of PM Narendra Modi.  The swearing-in chart is the "birth" of the government and many subsequent developments on the political scene may be seen through this chart.  The budget disappointment is likely a reflection of the near-conjunction of Rahu and Mars.  Rahu (North Lunar Node) and Mars are both considered natural malefics which tend to create significant problems when they are associated with each other as they are here.  The difficulty for Jaitley and Modi is that the Rahu-Mars conjunction occurred almost exactly on the equal 12th house cusp at 29 Virgo.  The negative symbolism of the 12th house includes loss, sorrows, and isolation.   These sorts of manifestations would be more likely when a malefic planet like Rahu and/or Mars comes in contact with the cusp.  Both planets were just one degree on either side of this cusp. Interestingly, the focus of public attention and prominence of the government at the time of this budget announcement was also represented through the near exact Sun conjunction to Jupiter in Gemini.

The government is likely to be on the defensive for a few more weeks here as Rahu transits over that 12th cusp a bit longer.  After that, I would think that the period in late August or early September may be difficult also due to the transit of Mars and Saturn over the Ascendant at 29 Libra.  This looks like a time of intense scrutiny.  Saturn's role as the planet that governs austerity and responsibility may indicate issues regarding debt/deficit or government spending cuts will be at the forefront.  Perhaps Jaitley will address the subsidies question at this time.  

In October and November, Saturn transits the Ascendant at the same time that Jupiter conjoins the 10th house cusp.  While Jupiter is usually positive, the simultaneity of this mundane square of Saturn and Jupiter to the key angles in the chart does not look helpful for the government.  Jupiter-Saturn combinations are often prominent in times of blocked progress and stubbornness in the face of opposition.  The Jupiter conjunction to the 10th house suggests that the government may well enjoy some popularity, but the presence of Saturn on the Ascendant is an indication of disappointment, failure or resistance to their actions.  Overall, this chart suggests it could well be a rocky first year for the Modi government.

World Cup Update

Germany defeated Argentina in the World Cup final 1-0 on an overtime goal by Mario Gotze today.  I had thought that Argentina under the leadership of Lionel Messi had a decent chance to win but was unsure if they could really do it.  Messi's chart had some bright spots in the Venus and Jupiter transits but it wasn't enough.  He did win the Golden Ball as the best player in the tournament but it was not much of a consolation.

Financial Markets Update

As noted above, Indian stocks sold off last week as investors expressed their disappointment with the budget.  The Sensex lost more than 3% and closed just above 25,000.   US Stocks ended only modestly lower on the week as the Dow closed just below 17,000.  I thought a little more upside was possible last week while noting at the same time the growing influence of bearish Saturn on sentiment. 

Mars conjoins Rahu on Monday just as the red planet changes signs and enters Libra.  Typically, this is usually a recipe for a decline.  One potentially offsetting factor here is that benefic Venus will enter Gemini on the same day.  This could go either way but I would be concerned more about the twin effects of Rahu and Mars.  Meanwhile, Saturn is likely increasing its collective influence ahead of its direct station on 20 July.  Gains are still possible with a strengthening Saturn but they are not something one can properly expect.