Ayodhya verdict big positive for market, economy, say Dalal Street veterans

Market analysts and economists on Saturday said the Supreme Court verdict, ending an over a century-old dispute, would be good for the economy and markets in general, as it has removed a major uncertainty over the country’s polity and policy.

It will help improve confidence of global investors towards the Indian economy, they felt.

Nine years after an Allahabad High Court ruling in the case, the apex court on Saturday ruled that the Hindus would get the entire disputed 2.77 acres in Ayodhya. Muslims will get alternate land either in the surplus 67 acres acquired in and around the disputed structure by the central government or any other prominent place, the court ruled.

The entire 2.77 acres will remain with the receiver and will be handed over to a trust to be formed within three months to build a temple. The Nirmohi Akhara is not the sebait (priestly right), the court held. Instead it will get to be a member on the trust.

The court said it was not ruling on faith, but the fact that Muslim possession over the inner courtyard was always contested by the Hindus, who continued to pray at the spot.

“The market is definitely going to take it very positively. Any measure that has been taken to facilitate smooth functioning of the country will inspire a lot of confidence among global investors on our country,” said Deven Choksey, a market veteran and MD of KR Choksey Investment Managers.

The five-judge Constitution bench, headed by Chief Justice Ranjan Gogoi, put an end to the long dispute. The court said the mosque should be constructed at a “prominent site” and a trust should be formed within three months for the construction of the temple at the site many Hindus believe Lord Ram was born.

“Uttar Pradesh (UP) plays a very big role in our economy. For India to become a $5 trillion economy, it is necessary to get a contribution of $1 trillion from that state alone,” said Mumbai-based investor Vijay Kedia.

He said by simple logic, once the temple and mosque are ready, about 50 lakh people are estimated to visit Ayodhya. Once the environment becomes peaceful, it would give boost to tourism in the state.

Sanjiv Bhasin, EVP for Markets at IIFL Securities, said the decision tells you that the government is doing what has not been done in last 70 years.

“First the Article 370 in Kashmir was abrogated and now this. I think you will get more reforms, maybe LTCG and personal tax concessions going by what Moody’s has done,” said Bhasin.

He said Friday’s decline in the market should be used to buy stocks. “I am extremely bullish on the market with new highs just a matter of time now,” he said.

Equity benchmark BSE Sensex tanked 330 points on Friday as sentiment soured after Moody’s cut India’s credit rating outlook, citing growth concerns.

Kedia said the verdict opens the doors for 50,000 to 1 lakh tourists from different part of India and abroad to visit Ayodhya on a daily basis “It can easily be like Vaishno Devi and Tirupati, which have changed the economies of those regions. Ayodhya will be bigger than all of them,” he pointed out.

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