Now that the trust vote has been won and Singh is indeed king, as the song goes, it may be time to ask the PM what's the economic agenda, jahanpanah?

As there is a sea change between what the UPA and its supporting comrades stood for in May 2004, and what the UPA and its new allies stand for now, it may not be out of place for the alliance to revisit its economic manifesto and present the chiselled version to the public and market.

It will also be right that the market comes to know of the plan in one go so that it can make up its mind. It will also be an opportunity to know how sectarian the SP's agenda is. It may, for all we know, be better than what the market fears.

In a previous column, we had discussed the limited elbow room a poll-bound government has to execute reforms. It cannot, for example, allow steel and cement companies to pass on increased manufacturing cost to consumers.

The easiest thing for the government to do is to dilute government holdings in such a way that it still retains the majority. This helps in bridging the gap in the fiscal deficit.

Or, if the government wants, it can spend more on popular schemes ahead of the deadline of the election commission. The talk of a BSNL offering, for instance, has resulted in ITI,a PSU vendor for BSNL, zooming 47 per cent in three sessions.

Most PSU IPOs have done well on the bourses. They have a positive effect on the overall market largely because they leave something on the table for the investor in terms of post issue appreciation.

The SBI [Get Quote] and SBS marriage announced by the government will need to be blessed by Parliament, something that seems wishful thinking at this juncture.

Apart from the domestic triggers, our markets were also helped by two key international triggers. One is the sustained weakness in crude, and there is also the abrupt change in short selling rules brought about by the US Securities Exchange and Commission.

As far as crude is concerned, it could further unwind. But a sustained unwinding is not foreseen. I have a more concrete answer for the SEC move. History has shown that such moves by regulators have a short-term effect. The markets soon learn to live with them and fundamentals take over.

The SEC announced the change in rules on July 15, and on July 16 the KBW Bank Index on NYSE produced its largest rise ever in history - 17 per cent. Coming just ahead of key banking results, the SEC managed to create a scare as the shorts scampered to cover. Stocks rose despite lower profits, which was seen as a bottoming-out process.

Now that the short covering has run its course, the same KBW Bank Index tanked on Thursday producing the worst fall in nearly eight years.

In April 1932, when a cumbersome rule that required written permission from each shareholder before a broker lent out his stock was introduced, the Dow rallied 3.51 per cent. By the time the rules were instituted weeks later, the short covering was over and the slump had resumed.

More recently, in Pakistan, regulators, in order to prop up a falling market, banned short sales and introduced a rule limiting daily price declines to 1 per cent while allowing them to rise by 10 per cent.

The KSE 100 Index rallied 8.6 per cent on the first day and then went into a tailspin, falling every single day in the next 15 sessions. It now quotes 20 per cent lower than the day when it rose 8.6 per cent.

Some wags on Dalal Street [Get Quote] are opining that lower than feared inflation of 11.89 per cent and a falling crude could prompt Dr Reddy to administer a smaller dose of his regulatory medicine on July 29.

For an upright man who is nearing the end of his term, he would not like to be seen as taking dictation from political bosses.