Elections could be make-or-break event for India

The forthcoming elections are a make-or-break event for India, global investment bank Noumra says.

A stable government could reinvigorate animal spirits, ease business uncertainty and address the supply bottlenecks, which could swing investor sentiment significantly in favour of India. A hotchpotch coalition government, however, would diminish prospects of reviving potential growth and risk significant capital outflows, it says.

Nomura's analysts say there's 50 per cent probability that the BJP's Prime Ministerial candidate Narendra Modi would be able to pursue reforms, cut red tape and boost investment in infrastructure.

The expectation of a Modi-led government has attracted overseas investors into Indian stock markets. The Sensex and Nifty have rallied to record highs this week, while the rupee has jumped to near 7-month high despite global headwinds such as the geopolitical standoff in Ukraine, fears of slowdown in China and tapering of monetary stimulus by the US.

Private sector investment in India has fallen consistently since 2007, first because of the global economic crisis (2008-09) and the subsequent expansionary fiscal policies of the government. The sharp slowdown means India has witnessed sub-5 per cent GDP growth over the previous five quarters.

Nomura says a Modi-led government could result in the following big changes in the medium term,

1) Business confidence will be boosted and there will be a revival in the capex cycle by 'de-bottlenecking' existing investment projects, which are stuck because of a lack of policy clearances. Fresh investment could be announced over time.

2) Fiscal consolidation backed by fiscal reforms such as the Goods and Service tax and rationalization of misdirected subsidies will help crowd-in private investments. It would remove the threat of rating downgrade that has been hanging over India for the past two years.

3) Lower inflation over time would increase real disposable income and boost financial savings, increasing the economy's ability to finance its investment needs.

Nomura expects the rupee to rise below 60 per dollar by June 2014 if a strong government comes to power post elections. It maintained its end-December Sensex target of 24,700. In the long term, Nomura expects the Indian economy to grow above 6 per cent in 2016, from an average of 4.7 per cent in 2013-14. more  

View all 6 comments Below 6 comments
In this election, we need our politician to be real public servant as we are paying a handsome salary including all facilities to his entire family.
See we all are paying huge taxes, direct or indirect taxes as mentioned below and what we get in return from our so called Rajnetas.
Have you ever thought that, on every daily consumable items how much indirect tax you are paying.
(Toothpaste, brush, clothes, shoes, etc. ) - Excise tax, sale tax, VAT, service tax, education cess, etc
Kirana items- pulses , Grains and masalas - sale tax, CST, VAT, Mandi samiti taxes, etc
Property ( House) – Service Tax, Registration tax Stamp Duty, maintenance tax – House tax, property tax, water tax, sewer tax. When you go to sell you pay income tax also
Fix Diposit – Tax on interest
Vehicle – Excise tax, Sale tax,(included in cost) Registration tax, Road tax, insurance including service tax
Fuel for vehicle – Petrol, Diesel, Gas etc. ( Excise, central govt. tax, state govt. tax, service tax, etc.)

(See the fun you are paying road tax and on each and every highway paying toll tax, why? you are paying water bill and Purchase drinking water separate, You are paying electric bill and hardly gets 8 hour supply, If there is something wrong you fear to go to police, you are paying various tax to municipality and suffering encroachment by vendors and parking, When you will take ownership? Man it’s you who is paying for enjoyment of politicians) more  
vote 4 country, so vote 4 Modi ji.

On Mon, Mar 17, 2014 at 10:30 PM, Sheetal Jain <support@localcirclesmail.com
> wrote:

> more  
yes choice is yours to choose the lesser evil, lesser corrupt
can you have hope against hope when despite such a hue and cry, corruption in BJP led MCD is on the increase every day. Why nobody speaks about this issue at all. more  
This is what many political parties have been taking advantage of... and AAP is trying to exploit it to the maximum. That's why I say that they are learning very very fast, what other parties took years to learn! more  
as a person in practice , can understand every bit but how to convince the man on road, cartwala and subziwala............ and most important SHRI ARVIND KEJRIWAL KA PHOOLWALA. a very simple sentence ....." aapko apna haq milega" more  
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