Straight from the Specialists
(This piece comes from Project Syndicate. The opinions expressed are the author’s own)
The overwhelming victory of the Indian National Congress in elections in the important southern state of Karnataka in early May has shaken up the country’s political scene. India’s troubled ruling party had appeared headed downhill in the build-up to the next general elections, which must be held by May 2014. Now, following its huge win in Karnataka, all bets are off.
Karnataka (whose capital, Bangalore, is a symbol of India’s thriving software and business-process-outsourcing industries) had been ruled for the previous five years by the Bharatiya Janata Party, the country’s main opposition party, which governed India from 1998 to 2004. The BJP’s victory in the state in 2008 was hailed as a milestone in its effort to position itself as a natural party of government. Support for the BJP in Karnataka, with its affluent, well-educated voters and its significant Christian and Muslim minority populations, was widely depicted as evidence that the party – usually identified with Hindu chauvinism and an electoral base concentrated in Hindi-speaking northern states – could broaden its appeal beyond its traditional constituencies.
As the Congress-led national government (of which I am a member) reeled under a series of political and financial scandals, the BJP increasingly sought to position itself as the obvious national alternative. India’s hyperactive media began to celebrate the ambitions of the BJP’s most visible leader, Narendra Modi, chief minister of the western state of Gujarat, who has assiduously presented himself as an avatar of effective government, in contrast to the controversy-ridden establishment in New Delhi. The BJP, however, proceeded to paralyze Parliament with unruly calls for the government to resign.
(Any opinions expressed here are those of the author and not of Thomson Reuters)
The bulls are back and their four-week winning streak saw the Nifty close at a 29-month high of 6107 on Friday, up about 2.75 percent for the week. Liquidity flows remain robust, fuelling the momentum despite political heat in New Delhi.
The Congress win in Karnataka boosted positive sentiment, followed by industrial output data that was marginally better than expectations. The overall earnings season has been favourable and along with the global rally provided the right environment for the markets to cross the psychological barrier of 6100 in the Nifty and 20000 on the Sensex. The only thing missing is euphoria on the street and broader participation by investors.
(The views expressed in this column are the author’s own and do not represent those of Reuters)
The government’s cash transfer scheme (CTS) has been accepted by economists as the most efficient method of delivering subsidies to the poor. This became possible with the identification of the poor after the introduction of “Aadhaar” or unique identity scheme. The scheme is going to be implemented from the beginning of 2013.