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

File photo: Curry chicken on rice. Sam Leung/PNG

Spicy treats on menu as 8 chef teams battle for Vancouver’s second-annual Curry Cup

VANCOUVER DESI A group of Lower Mainland chefs are set to go head-to-head with their South Asian cooking skills as they gear up for Vancouver’s…
Continue Reading »

Shah Rukh Khan, Abhishek Bachchan, Deepika Padukone, Sonu Sood and Boman Irani in a still from the Bollywood film Happy New Year.

Indian expat avoids stalking conviction by blaming Bollywood for his behaviour

IANS Sydney  – An Indian man’s excuse that Bollywood love stories encouraged him to excessively approach and stalk women helped him avoid conviction in the…
Continue Reading »

Bobby Singh

Spice Sports: Football Champion Bobby Singh – On & Off The Field

GOPI AND THE GORA FOR VANCOUVER DESI TUNE IN TO SPICE SPORTS, M-F, 5-7PM ON SPICE RADIO 1200AM Former BC Lion Bobby Singh was in…
Continue Reading »

LOCAL NEWS

File photo: Curry chicken on rice. Sam Leung/PNG

Spicy treats on menu as 8 chef teams battle for Vancouver’s second-annual Curry Cup

VANCOUVER DESI A group of Lower Mainland chefs are set to go head-to-head with their South Asian cooking skills as they gear up for Vancouver’s…
Continue Reading »

Bobby Singh

Spice Sports: Football Champion Bobby Singh – On & Off The Field

GOPI AND THE GORA FOR VANCOUVER DESI TUNE IN TO SPICE SPORTS, M-F, 5-7PM ON SPICE RADIO 1200AM Former BC Lion Bobby Singh was in…
Continue Reading »

WEBPIX_20140524_216100506

Julie Paskall: Accused will be tried for second-degree murder of Surrey hockey mom

JENNIFER SALTMAN VANCOUVER DESI The man accused of killing Surrey hockey mom Julie Paskall has been ordered to stand trial in B.C. Supreme Court. A…
Continue Reading »

Don't Miss...

Vancouver-BC

Raise your hand, send us a selfie and make a statement against racism (with video)

VANCOUVER DESI Vancouver Desi’s digital anti-racism campaign, Raise Your Hands Against Racism, officially kicked off Thursday, with people across the Lower Mainland sending in selfies…
Continue Reading »

Indian spectators watch as a float carrying a sign that reads "Congratulations! It's a Baby Girl" passes by during the Indian Republic Day parade in New Delhi on January 26, 2015. The float represented India's Ministry of Women and Child Development.  An estimated 26 million babies are born anually in India, a country considered to be one of the worst places to be born a girl because of a societal 'gender gap' that favours boys and preferences for male children.  ROBERTO SCHMIDT/AFP/Getty Images

India’s Supreme Court bans online advertisements for pre-birth sex tests

VANCOUVER DESI India’s Supreme Court has ordered Internet giants Google, Yahoo and Microsoft to block all advertisements for pre-birth tests that determine a child’s gender,…
Continue Reading »

sethi

American Punjabi rapper feels at home in Vancouver

Collaborative hip hop and artistic group Char Bagh set to play the PuSh Festival on Saturday   LARISSA CAHUTE VANCOUVER DESI California-based MC and artist…
Continue Reading »

File photo: Sikhs gather in Surrey April 2014 to celebrate Vaisakhi. Nick Procaylo/PNG

New study finds most Americans know nothing about Sikhism

ARUN KUMAR IANS Washington  – Although more than half a million Sikhs live in the U.S., a majority of Americans are unaware of what Sikhism…
Continue Reading »

Sri Lankan Air Force pilots fly MiG-27 jet fighters during a passing out ceremony of 329 men and officers in the north-eastern town of Trincomalee on August 21, 2009. Ishara S. KODIKARA/AFP/Getty Images

Motorcyclist miraculously survives crash with Indian fighter jet

VANCOUVER DESI A 26-year-old groom-to-be miraculously survived after an Indian fighter jet collided with his motorcycle in Rajasthan, according to Britain’s Daily Mail. Loon Singh,…
Continue Reading »


Bollywood Latest

Indian Bollywood actor Anil Kapoor  poses for a photograph during the Celebrity Cricket League (CCL) season five in Mumbai on January 10, 2015. STRSTRDEL/AFP/Getty Images

Anil Kapoor says he exercises six days a week

IANS New Delhi  – Actor-filmmaker Anil Kapoor says he exercises six days a week and recalls the time he’d cycle to the set location –…
Continue Reading »

Bollywood movie

Bollywood megastar Amitabh Bachchan rules out Hollywood

VANCOUVER DESI Bollywood megastar Amitabh Bachchan doesn’t foresee a transition to Hollywood, according to SkyNews. Although Bachchan recently appeared alongside Hollywood’s Leonardo DiCaprio in The…
Continue Reading »

Screen shot of Shah Rukh Khan's first video tweet. Submitted.

Shah Rukh Khan sends out India’s first tweet using Twitter’s new mobile video camera

VANCOUVER DESI Bollywood superstar Shah Rukh Khan was the first-ever Indian to use Twitter’s freshly launched mobile video camera. Twitter announced the new feature on…
Continue Reading »