The FIIs (Foreign Institutional Investors) applauded Prime Minister Narendra Modi led-BJP’s (Bharatiya Janata Party) clean sweep in the Lok Sabha elections 2019 and said to bring new reforms, big improvements in the economic state of the country.
“The rise in pitch in the trade dispute between the US and China should make India more attractive to foreign investors, as India is not as exposed to global merchandise trade and Indian economy should benefit from any weakness in crude prices due to lower global growth expectations,” said Darshan Bhatt, co-founder and deputy CIO at Glovista Investments.
Bhatt further added that the spending on infrastructure sector, especially, the resolution of the NPAs (Non-performing assets) on the banking sector balance sheet should be priorities for the government in the immediate future. Whereas, the long-term policies implemented by the BJP government to increase rural growth, agrarian distress, employment and productivity should be the main aim to increase the potential growth rate for India.
FIIs, however, throws light on Prime Minister’s prime job now is to pay stern attention on implementing new reforms and boost the slow pacing economy.
“The election result is positive for Indian stocks, because it reduces uncertainty and gives Modi a strong mandate to continue his policies. I expect India to outperform other emerging markets, because it is not affected that much by the trade war and now uncertainty related to elections is out of the way,” Hertta Alava, senior strategist at Nordea, Finland told ETMarkets.com from Helsinki, in an email.
On the domestic front, Modi’s immediate challenge will boost economic growth, which fell to an annual 6.6 per cent during October-December, its lowest in five quarters. Also, there is an urgent need to address the liquidity woes that are bothering the country’s non-banking finance companies (NBFCs).
Other economic indicators such as industrial output and manufacturing growth have all weakened in recent quarters which the incumbent government in its second term should look after, according to the FIIs.
Conclusively, the landslide victory for the BJP was marked as a first time for a single political party to win back-to-back elections since 1984. The stand alone BJP won more than 300 votes while the NDA (National Democratic Alliance) created history with 50 per cent plus vote share.