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By:

Quaid Najmi

4 January 2025 at 3:26:24 pm

‘Now, political defections possible without losing seat’

The recent ‘experiments’ in Ambernath and Akot civic bodies have created a political storm. Renowned legal expert, Barrister Vinod Tiwari, President of Council for Protection of Rights (CPR), gives a perspective to the row while interacting with Quaid Najmi. Excerpts... What is the Anti-Defection Law under the Indian Constitution? The Anti-Defection Law is part of the Tenth Schedule of the Indian Constitution. It was introduced through the 52nd Constitutional Amendment in 1985. The main...

‘Now, political defections possible without losing seat’

The recent ‘experiments’ in Ambernath and Akot civic bodies have created a political storm. Renowned legal expert, Barrister Vinod Tiwari, President of Council for Protection of Rights (CPR), gives a perspective to the row while interacting with Quaid Najmi. Excerpts... What is the Anti-Defection Law under the Indian Constitution? The Anti-Defection Law is part of the Tenth Schedule of the Indian Constitution. It was introduced through the 52nd Constitutional Amendment in 1985. The main purpose is to stop elected representatives – MPs and MLAs - from switching political parties after elections for personal/political gain. It aims to ensure political stability, respect the mandate of voters, and prevent unethical political practices. Under this law, an elected representative can be disqualified if he/she voluntarily gives up the party membership or vote against their party’s official direction (whip). There are limited exceptions, like when two-thirds of a party’s members agree to merge with another party. The Speaker or Chairman decides disqualification cases, but their decisions can be reviewed by courts.   Is there a similar Anti-Defection law for local bodies in Maharashtra? Keeping in mind the spirit of the Tenth Schedule, Maharashtra enacted the Maharashtra Local Authority Members’ Disqualification Act, 1986 (enforced in 1987). It applies to Municipal Councils and other local bodies and was meant to stop the elected councillors from hopping across parties post-elections, and preserve the voters’ mandate at the local level.   Why is there so much unrest in the 2025-2026 civic bodies elections? The root cause lies in post-poll alliances, which have been made legally easier through amendments to Section 63 of the Maharashtra Municipal Councils Act, 1965. They allow political parties and/or councillors to form post-election fronts or groups. Over time, political parties have collectively and deliberately weakened the 1986 Disqualification Act, and it is now what I would call a “toothless tiger.” Hence, the strange and opportunistic post-elections alliances witnessed in Ambernath (Thane) and Akot (Akola), and some others after the December 20 municipal council elections.   How exactly was the Anti-Defection law diluted? It was through a quietly crafted amendment to Section 63 of the Municipal Councils Act, 1965, which was implemented after the 2016 local bodies elections, although the Disqualification Act remained on paper. It allows councillors and political parties - within one month of election results - to form a post-poll group or alliance, even if they contested elections separately. Once registered, this newly-formed group is treated as if it were a pre-poll alliance, and the Anti-Defection law applies only after that point. This effectively ‘legalised defections disguised as alliances’.   What were the repercussions? Another major blow came when the State Government amended the law to give itself appellate powers in Anti-Defection cases involving local bodies. Earlier, decisions were taken by Commissioners or Collectors. Now, any aggrieved councillor can appeal to the State Government, which becomes the final authority. This has given huge relief to defectors, especially when the ruling party controls the state government. Now elected representatives brazenly switch sides, aware they may not face serious consequences.   What is the long-term fallout of this trend? These amendments have made post-poll “marriages of convenience” the new political norm. The ruling party always has an unfair advantage, often forming governments without securing a clear electoral majority. This completely undermines democracy and voter trust, besides going contrary to the original purpose of the Anti-Defection Law.

Market Volatility and New Year’s Resolutions

The recent stock market slowdown may have made you nervous. But there is good news - it does not last long, just like your New Year’s resolutions. Every year, countless people set New Year’s resolutions, vowing to change habits and achieve certain goals. Yet, studies show that most resolutions fade very soon. In the world of investing, stock market volatility and corrections share a similar story - they make headlines, cause momentary jitters, but often do not last long.


Common As Your Birthday

Yes, the stock market has given disappointing returns since the September 2024 all-time highs. But, education here is important. Historically, stock market corrections are as common as your birthday - they come every year. The data point is that since its inception, the Sensex has corrected by 10 to 20 percent roughly every 12 to 18 months from its recent highs. Market corrections are common, necessary, and healthy, as they smooth out technical indicators and lay the foundation for new all-time highs to be achieved. Without these pullbacks, markets would risk becoming overextended and unsustainable.


Don’t Time The Market

One of the most important lessons for investors is not to attempt to time the market. Your time spent in the market is more important than timing the market. The truth is - no one knows how long markets will fall or by how much. Similarly, no one knows when the market will recover and to what levels. Hence, timing often leads to missed opportunities. According to veteran fund manager and investor Peter Lynch, “Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.”


Don’t Wait To Invest

Do not wait to invest. Invest and then wait. The sooner you invest, the sooner your money begins to grow. The best time to invest is always now - as soon as you have funds available. Invest quickly and focus on staying invested. It is smarter to focus on the long term. There is a bigger risk in staying out of the market, meaning not investing your funds, than staying inside the market.


Focus On Lumpsum

The key to wealth creation is to start early, stay consistent, invest sufficiently, and stay invested in a mix of mutual funds and direct stocks. Apart from your ongoing Systematic Investment Plans (SIPs), it is necessary to make lumpsum investments when you have extra idle funds. By having a smart financial advisor at your helm, he will guide you to invest lumpsum money using special schemes and strategies. The key to wealth creation is simple - do sufficient SIPs, increase SIPs every 12 months, and do lumpsum investments whenever possible.


Moral

The rule is simple: invest quickly, wait, and let the market do its work. Stock market corrections will come and go, just like New Year’s resolutions, but your long-term success depends on how much time you spend in the market, not on timing it.


(The writer is a Chartered Accountant and CFA (USA). Financial Advisor.  He could be reached on 9833133605. Views personal.) 

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