Investors hope India elections will bring new government to break deadlock, revive growth

Published: April 9, 2014

Flower petals are thrown around Bharatiya Janata Party (BJP) leader Narendra Modi as he rides in an open jeep on his way to file nomination papers on April 9, 2014 in Vadodra, India. Kevin Frayer/Getty Images

KAY JOHNSON
THE ASSOCIATED PRESS

MUMBAI, India — India’s stock market has hit several new highs in the last month and the once-struggling rupee has strengthened on signs that the opposition Bharatiya Janata Party will win the largest bloc of seats in parliamentary elections that began this week and run until May 12.

The Hindu nationalist BJP has been emphasizing its prime ministerial candidate Narendra Modi’s pro-business credentials and economic success as leader of Gujarat state.

India’s once-impressive growth slowed to a decade low of 4.5 per cent in the 2012-13 fiscal year and investors are frustrated with the Congress party-led government.

Here are some of the economic and business issues at stake in the election.

STABLE GOVERNMENT: No single party has won a majority in India’s parliament for three decades, and with many regional parties involved, coalitions are a fact of life. How well the BJP does in the elections will affect how much of its pro-business agenda can be implemented. It takes 272 seats to form a government, but analysts say the magic number for BJP is about 200 which would give it strong leadership of a coalition. Anything above 200 is likely to send markets surging higher, while anything below 180 BJP seats could signal another weak coalition and continued policy paralysis.

INFRASTRUCTURE FOCUS: India’s crumbling roads and ports, plus lack of adequate electricity supply are high on the list of problems that make business projects hard to get off the ground. In Gujarat, BJP leader Modi made infrastructure improvements a priority, building thousands of kilometres of highways and attracting investment to build up the country’s largest modern port. He promises to bring the same focus if elected prime minister.

FOREIGN INVESTMENT: The BJP dismayed some investors with a vow to reverse the Congress-led government’s opening of India’s vast retail industry to foreign investors. Liberalizing access to India’s $400 billion retail market is seen as one of the fastest paths to attracting investment. However, Modi’s party said it will open other industries now mostly reserved for Indian companies. That could include insurance, real estate and defence.

PROJECT CLEARANCES: The BJP has vowed to break the bottlenecks that are keeping hundreds of business and infrastructure projects in limbo because of environmental and other regulations or land acquisition issues. But it’s unclear whether even a strong Modi-led government would have the power to do that. A recent report by Credit Suisse estimated that 75 per cent of the projects that are stuck are due to state regulations, which the central government can do little to solve.

LABOUR LAWS: Modi’s party has promised to change tough labour laws that make foreign manufacturers reluctant to set up factories in India. Manufacturing makes up only 15 per cent of India’s economy, compared to 31 per cent in China. Attracting manufacturing investment is key to creating jobs for the 13 million young Indians entering the workforce each year.

TAX CLARITY: Several international companies including Vodafone, Nokia and IBM are embroiled in tax disputes with India’s government which is claiming taxes totalling several billion dollars. Investors were rattled in 2012 when, after India’s Supreme Court ruled a $2 billion tax bill for Vodafone invalid, parliament changed the law and applied the tax retroactively. It’s unclear how those cases might change under a new government, but Modi has criticized the current aggressive stance as hurting India’s image. The BJP has promised a “clear tax policy to remove uncertainty and create investor confidence.”

06:24ET 09-04-14

[+]

Tags: , , , , , , , , , , , ,



Readers Comments (0)

Comments are closed.

Featured

Longtime Surrey politician and former mayor Bob Bose is pictured here near his south Surrey home on Monday, November 21, 2011. Jenelle Schneider/PNG

Former Surrey mayor Bob Bose backs Barinder Rasode, says no Surrey Matters slate coming

AMY REID SURREY NOW SURREY — Though Coun. Barinder Rasode has yet to officially announce her intentions to run for the city’s top job, she’s…
Continue Reading »

A Pakistani-Canadian blogger has released Pakistan's first-ever anti-homophobia children's book. Submitted photo/Nicemangos.blogspot.ca.

Toronto-based blogger releases Pakistan’s first anti-homophobia children’s book

VANCOUVER DESI A Toronto-based Pakistani blogger has written and released Pakistan’s first-ever anti-homophobia children’s book. Blogger Eiynah, known for her site Nice Mangos where she…
Continue Reading »

paintball

Photos: In country long awash with weapons of war, paintball takes hold in Afghanistan with splat

REBECCA SANTANA THE ASSOCIATED PRESS KABUL, Afghanistan — The hidden gunman, dressed in long green coveralls and a SWAT-team-style vest and helmet, looks ominous as…
Continue Reading »

LOCAL NEWS

Longtime Surrey politician and former mayor Bob Bose is pictured here near his south Surrey home on Monday, November 21, 2011. Jenelle Schneider/PNG

Former Surrey mayor Bob Bose backs Barinder Rasode, says no Surrey Matters slate coming

AMY REID SURREY NOW SURREY — Though Coun. Barinder Rasode has yet to officially announce her intentions to run for the city’s top job, she’s…
Continue Reading »

A Pakistani-Canadian blogger has released Pakistan's first-ever anti-homophobia children's book. Submitted photo/Nicemangos.blogspot.ca.

Toronto-based blogger releases Pakistan’s first anti-homophobia children’s book

VANCOUVER DESI A Toronto-based Pakistani blogger has written and released Pakistan’s first-ever anti-homophobia children’s book. Blogger Eiynah, known for her site Nice Mangos where she…
Continue Reading »

A tour bus has crashed on the Coquihalla Highway near Merritt. There are many injuries and at least six passengers are in critical condition.Adam Hopewell /Courtesy Global B.C.

RCMP say speed not a factor in Coquihalla tour bus crash that injured nearly 60

STEPHANIE IP VANCOUVER DESI Mounties say a dashboard camera from a tractor-trailer captured a tour bus rollover that injured all 56 passengers in a tour…
Continue Reading »

Don't Miss...

Rice Bucket India poverty

India’s Rice Bucket Challenge gives a ‘meaningful twist’ to ALS ice bucket challenge

VANCOUVER DESI India has created its own “desi” version of the ALS ice bucket challenge that has swept the globe. While the original icy cold…
Continue Reading »

India

Man proudly wears world’s largest turban weighing in at 100 pounds and 645 metres long unwrapped

VANCOUVER DESI A 60-year-old devout Sikh in northern India appears to be the proud owner of the world’s largest turban – weighing in at 100…
Continue Reading »

Elephant headed god

Gallery: India prepares to welcome elephant-headed Lord Ganesha

VANCOUVER DESI Preparations for Ganesh Chaturthi, a festival marking the birth of the elephant-headed god, have taken off in India as Hindus prepare to welcome…
Continue Reading »

Witches Burned Victim Alive In Front Of Family

Witches burn Indian dad alive in a bizarre ritual in front of his wife and 10-year-old son

CEN AGENCY Witches who burned a man alive after chopping off his arms in a bizarre ritual have been seized by police in central India….
Continue Reading »

India-Khatav-Akola,Maharashtra

Baby born with two faces in India fighting for life (Warning: Graphic content)

VANCOUVER DESI A baby born with two faces and four eyes is fighting for her life at a hospital in western India, according to Ruptly….
Continue Reading »


Bollywood Latest

Newly-elected Bharatiya Janata Party (BJP) Member of Parliament and Indian Bollywood actor Paresh Rawal arrives in Parliament in New Delhi on May 20, 2014. India's Narendra Modi is expected to formally declare his intention to form the next government May 20, days after his Hindu nationalist party won the first parliamentary majority in three decades. PRAKASH SINGH/AFP/Getty Images

No one else can play the role: Paresh Rawal on Modi biopic

IANS Mumbai  – Versatile actor Paresh Rawal, who will soon start shooting for a biopic on Prime Minister Narendra Modi, says he is the right…
Continue Reading »

hot photos desi actress bollywood sex

Gallery: Deepika Padukone photo shoot

VANCOUVER DESI Bollywood beauty Deepika Padukone, who is creating a lot of buzz with her upcoming film Finding Fanny, poses for the camera. Related Stories:…
Continue Reading »

Bollywood desi boobs sex

Bollywood’s bold babe Sherlyn Chopra strips for Playboy

VANCOUVER DESI Bollywood actress Sherlyn Chopra marks the first-ever Indian model to pose for Playboy magazine, according to eonline.com. While the 30-year-old announced she’d be…
Continue Reading »