Financial lessons from the Indian elections

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Financial-PlanningIndian elections are undoubtedly the biggest democratic exercise in the world. And, rightly so. With over 900 million registered voters and one million polling stations across the country, this exercise, spread over five weeks, is a massive undertaking of the scale unlike anywhere in the world. Apart from its gigantic proportions, the fact that this election determines the trajectory of the largest democracy in the world for the next five years makes it all the more interesting.

Social media feeds and news channels are constantly bombarding us with minute by minute development in this saga. Discussions among friends and acquaintances too are incomplete these days without a reference to the general elections. Though much debate is centred on the outcome of the elections, the exercise in itself is not getting its due attention.

A closer analysis of the elections process offers important insights to tackle any complex decision-making exercise. Difficult to believe? Let us show you how an arduous task like financial planning becomes simpler when you approach it just the way you do the general elections. Here is how.

Treat it as the most important event

Elections are and must be regarded as the most important event in any democracy. The elected representatives play a crucial role in improving the overall quality of life for the citizens. The social and economic character of the country is shaped by the ruling party. Hence, it becomes crucial for every citizen to participate in this exercise. Failure to recognise the importance of elections can compromise the future course of a nation’s progress. Financial planning too has long-term repercussions on the overall well-being of an individual. Those who fail to recognise the importance of financial planning face the consequences later when they have to adjust their lifestyle as per their limited resources. Instead of being wary or pushing it for later, every individual should recognise the importance of planning the finances and start the process at the earliest to build a good life.

The election is fought on issues

Every political party that participates in the great Indian elections entice voters with promises of a brighter future. Votes are sought on key development issues, like poverty, farmer distress, economy, education and healthcare, with every party promising to work towards these goals once elected to power. These goals act as a pull for the voters to exercise their power and select a representative who can achieve those goals. Clarity on goals is not only crucial for selecting the right candidate but also for adding the right options to your investment portfolio. Clearly identifying goals, like buying a house, children’s education, retirement, healthcare, etc., can help you to identify the right investment avenues which can get you closer to your goals.

Extensive planning goes into it

Indian elections are scheduled to be completed in seven phases to cover 900 million eligible voters across 543 constituencies. A lot of planning goes into completing the task of this mammoth proportions smoothly. To ensure security at each polling station across the length and breadth of the country is no small task. Enough time is dedicated to ensuring effective allocation of facilities and resources to conduct the process without any hindrances. This principle of immaculate planning is also the key to build financial prosperity. Once the goals are defined, put a plan in place to invest wisely for accumulating the required fund within the stipulated timeframe.

The right selection is crucial

Promises aside, before casting a vote, a citizen is expected to read-up and gather information about the candidates standing from their constituencies to vote wisely. The voters tend to look at the performance record of the candidates and the strengths that they bring to the table for making the right choice. Building the right financial portfolio too requires in-depth research. An investor should learn about various investment options available and read up on their performance in the past. A careful analysis of the risks associated and the strengths of each investment avenue will help you to select the right ones to help you fulfil your financial goals.

Leverage the technology

In recent years, a heavy reliance on technology has been seen to make the voting process simpler and more transparent. A number of apps have been launched to enable voters to check their names in the electoral rolls, redress their grievances and report any violation of the code of conduct. In fact, the voting process itself has shifted from the ballot box to EVMs. Technology is not only simplifying elections but also financial planning. A number of apps are now available that help you calculate the SIPs you need to fulfil your financial goals. You can use apps to invest, automate your loan instalments/ credit card payments and read up on money matters. Leveraging technology not only makes the process hassle-free but also saves you precious time.

Always have checks and balances in place

A number of measures are taken to ensure that the poll process is free and fair. Introduction of voter-verifiable paper audit trail (VVPAT) for verification of voting, strict code of conduct, tight security and checks on online campaigning are a few such steps taken to ensure that the elections are impartial and in the best interest of the country. To ensure that your financial plan work in your best interest, it is important to have some checks and balances in place. Ensure that the asset allocation is as per your financial needs and not because of your bias towards a particular asset class. Review your portfolio frequently to ensure that your investments are taking you closer to your financial goals.

The importance of the election process in defining the trajectory of a nation cannot be emphasised enough. While as a responsible citizen we participate in general elections with a lot of enthusiasm, it is equally crucial that we approach other issues that matter to us with the same vigour. As your future prosperity depends on your present endeavour in financial planning, undertake this endeavour with the same spirit as you do the elections.

Author’s profile:

 Arun Thukral
Arun Thukral, MD & CEO, Axis Securities

Arun Thukral is the Managing Director & Chief Executive Officer of Axis Securities Limited, a subsidiary of Axis Bank engaged in the distribution of a wide range of financial solutions and broking services to retail customers. He is also the Director of Financial Planning Standards Board of India (FPSB). He is a veteran banker and has more than 25 years of experience in the financial services industry. Arun started his career with UTI and thereafter has been associated with Axis Bank since inception. His major stint has been with the Department of Treasury. He has worked both in Corporate Banking and Retail Banking.

(Views expressed in this article are a personal opinion of Arun Thukral, MD & CEO, Axis Securities.)

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