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from Ian Bremmer:

How far can Modi take India — and how fast?

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As a result of last week’s parliamentary election in India, three of the world’s strongest and most transformational leaders are now in Asia: Japan’s Shinzo Abe, China’s Xi Jinping, and India’s Narendra Modi. They control a fifth of the global economy and govern two-fifths of its citizens. All have active plans to shake up their societies.

The expectations and the stakes are sky-high for each of these leaders, but none more so than Modi. Last week, Modi won the world’s largest-ever democratic election in a decisive fashion, with his party converting 31 percent of the national vote into 52 percent of the seats in parliament -- the first absolute majority in the lower house of parliament since 1984. Meanwhile, the reigning National Congress Party -- which has ruled India nearly without a break since its independence from Britain -- turned in its worst-ever performance, losing three-quarters of its seats.

Why do Indian voters find Modi so appealing -- or, depending on your outlook, Congress’ leadership so repulsive? As chief minister of Gujarat, his state of 60 million people, Modi unlocked economic gains reminiscent of China. During his 12-year tenure, Gujarat’s per capita income outpaced the national average, rising almost fourfold. Modi put his money where his mottos were -- “less government and more governance” and “no red tape, only red carpet” --  paring back suffocating state inefficiencies to unlock business potential and competitiveness. This is precisely what the Congress party has been unable to solve at a national level, with high inflation, lagging economic growth (at least by historical standards), and legislative gridlock that makes America’s Congress look like a well-oiled machine.

Indian voters want Modi to implement the Gujarat model on a national scale. The question is whether Modi can do so as quickly and dramatically as Indians demand. Unlike China and Japan, power in India remains woefully decentralized, and a sweeping win won’t change that. We won’t see a quick recovery in India’s legislative output, which last year was at its least productive levels in history. That’s because the houses of parliament remain split, with the Congress party and its allies maintaining a plurality of seats in India’s upper house, the Rajya Sabha. Congress holds 12 of India's 28 (soon to be 29) states, which in turn elect the upper house members; Modi's BJP has only five.

from Expert Zone:

The rupee at a crossroads

(Any opinions expressed here are those of the author and not of Thomson Reuters)

The rupee was tossed around quite a bit in the last 10 months. It dropped to a low of nearly 69 to the dollar, creating an economic crisis, before it recovered and is now at 59-60. The threat is not that it may drop once again, but that it may appreciate further and upset the economy in other ways.

Why would the rupee appreciate? Because there are expectations the Narendra Modi government will facilitate development and enable the economy to get back on course. This is what drove the Sensex beyond 25,000. But the currency market was more stable in spite of the huge inflow of $2.2 billion in 10 trading days of May.

from Breakingviews:

Modi’s big win gives India way out of policy limbo

By Andy Mukherjee 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.   

Indian voters have just handed Narendra Modi their most decisive mandate in 30 years. The opposition politician’s landslide win ends a tortuous era of coalition politics that has stymied policymaking. It also offers India a way out of its current limbo.

from Expert Zone:

Debating India’s election cheat sheets

(Any opinions expressed here are those of the author and not of Thomson Reuters)

As the sun set on the final phase of polling in India on May 12, newsrooms were waiting impatiently for 6.30 p.m. -- the deadline set by the Election Commission for airing survey results on post-poll predictions.

Elaborate studio sets packed with guests and news anchors flanked by psephologists armed with data sets were all waiting to declare that Narendra Modi is coming to Delhi.

from Breakingviews:

India’s wobbly economy needs a factory revival

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

India needs a factory revival to boost its growth prospects. The country’s economy is unsteadily perched on software exports, hot money inflows and outsized fiscal transfers to villages. All three end up making the country’s exchange rate and labour uncompetitive. That shortens the fourth leg of the stool: manufacturing.

from Expert Zone:

A shortcut to industrial recovery

(Any opinions expressed here are those of the author and not of Thomson Reuters)

A worker sprays water over piles of coal at Mundra Port Coal Terminal in the western Indian state of GujaratThe rate of growth in infrastructure industries falling to 2.6 percent in FY2013-14 came as a shock. That’s because these industries had been consistently growing at relatively high rates in the previous three years, in spite of the drop in production in other industries.

Infrastructure industries include coal, crude oil, natural gas, refinery products, fertilizer, steel, cement and electricity. Production of natural gas has been shrinking since FY2011-12. Even so, the infrastructure group maintained steady growth between 5 percent and 6 percent. The sharp drop last year was caused by lower growth in the steel and cement industries.

from Expert Zone:

India’s next foreign policy

(This piece comes from Project Syndicate. The opinions expressed are the author’s own)

A guest holds the flags of the United States and India and a program in the East Room at the White House in Washington, November 24, 2009.     REUTERS/Jim Young/FilesNext month, India will complete its marathon election. A new government is expected to assume power at the end of May, and, if the polls prove correct, the Bharatiya Janata Party (BJP), which has named Narendra Modi as its prime ministerial candidate, will lead that government.

from India Insight:

They say every vote counts, but mine wasn’t

(Any views expressed in this article are those of the author and not necessarily those of Thomson Reuters Corp.)

Fifty-four percent of Bangalore's eligible voters showed up at the polls on April 17, a disappointing number considering the high turnout in some states. I was not among them, but it was not for lack of trying. Despite doing everything correctly, my application never went through.

from Breakingviews:

Review: India’s Singh wasn’t king, Modi could be

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Everything except the title of Sanjaya Baru’s “The Accidental Prime Minister” has invited controversy. And the title escaped opprobrium only because Manmohan Singh, who has never won an election, was the first to acknowledge that his elevation to India’s top political job was an accident of history.

from Expert Zone:

In defence of the defensives: Why IT, pharma stocks are not pariahs

(Any opinions expressed here are those of the author and not of Thomson Reuters)

Expectation that the ongoing general election will throw up a stable government has spurred a return to risk in domestic equities. The consequent rally has meant those favoured defensives of the sluggish times - information technology and pharma stocks - received a shearing.

The CNX IT index shed 7.8 percent and CNX Pharma 10.1 percent in March - even as the benchmark Nifty surged 6.8 percent.

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