Can India’s Modi win over allies to press ahead with economic reforms after election?
- While PM Narendra Modi may not have won a parliamentary majority, he could still succeed in implementing reforms if history is a guide
Modi’s Bharatiya Janata Party (BJP), which emerged the winner but fell well short of its target of an overwhelming parliamentary majority, is expected to be sworn into office this weekend with the support of allies under the National Democratic Alliance (NDA).
The index rose again on Wednesday after two key allies reaffirmed support for the BJP-led coalition government, and continued rising on Thursday, hovering around 75,074.51 in mid-afternoon Mumbai time.
“We expect policy continuity, especially with regard to budgetary emphasis on infrastructure spending and boosting domestic manufacturing to support robust economic growth,” said Christian de Guzman, a senior vice-president at Moody’s Ratings.
“However, the NDA’s relatively slim margin of victory as well as the BJP’s loss of its outright majority in parliament may delay more far-reaching economic and fiscal reforms that could impede progress on fiscal consolidation,” he said.