 "BJP likely to form next govt: Moody's")
Moody’s Analytics, the global provider of financial analysis services, said on Thursday that the Congress-led United Progressive Alliance (UPA) was likely to be replaced by a Narendra Modi-led government after the Lok Sabha elections. It further said the likely Bharatiya Janata Party-led government might be better at governing the economy, now facing low business confidence and investment levels.
“India’s electoral machine is grinding into action ahead of balloting set to take place in phases from April 7 to May 12. The current Congress-led government is likely to be ousted after a disappointing second term,” the research firm said.
The note, titled ‘DISMAL SCIENTIST—Asia?Pacific outlook: A slow start to the year’, further said the economy was weak, and business confidence and investment well below where they should be. “The new government, likely to be led by BJP candidate Narendra Modi, offers a chance for better governance,” it said.
Credit card dues had seen growth of only 1.6 per cent in the current financial year so far (April –January), while the propensity to borrow short-term for spending against time deposits had seen an erosion of four per cent in the first 10 months of the current financial year.
“Like the trade, industry and the financial markets, the consumer too is looking anxiously towards the government, hoping for some uptick in the economy, accompanied by a sharp fall in inflation of essential commodities and a drop in interest rates on loans for purchase of residential properties, two-wheelers and passenger cars,” the study said.
Despite some money from foreign institutional investors (FIIs) pouring into the stock and debt markets in the recent past, the equity market lacked depth and mid-cap and small-cap shares were in a shambles, the Assocham study said, adding the retail investors were really not enthused about investments in equity.
“It seems erosion in generation of new employment and lack of confidence about retaining the jobs with scores of companies going in for cost-cutting , the demand for discretionary goods, especially on bank loans, is bound to see a further drop.
The Assocham paper said if a stable government was voted into power, the first major turnaround will be seen in the markets, with FIIs focusing on India. This will help narrow the current account deficit and could prompt the government to relax the restrictions on gold imports, which in turn will see a revival in the entire gems and jewellery industry. Beside, better inflows will result in a strengthening of the rupee.
“India’s electoral machine is grinding into action ahead of balloting set to take place in phases from April 7 to May 12. The current Congress-led government is likely to be ousted after a disappointing second term,” the research firm said.
The note, titled ‘DISMAL SCIENTIST—Asia?Pacific outlook: A slow start to the year’, further said the economy was weak, and business confidence and investment well below where they should be. “The new government, likely to be led by BJP candidate Narendra Modi, offers a chance for better governance,” it said.
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Meanwhile, business chamber Assocham said consumer confidence in the economy had touched a new bottom, as reflected in data on credit cards and bank advances against time deposits. Their study, titled ‘Contraction in consumer confidence ahead of elections’, said low spending by consumers was not contributing to any increase in savings, reflecting pressure on household budgets.
Credit card dues had seen growth of only 1.6 per cent in the current financial year so far (April –January), while the propensity to borrow short-term for spending against time deposits had seen an erosion of four per cent in the first 10 months of the current financial year.
“Like the trade, industry and the financial markets, the consumer too is looking anxiously towards the government, hoping for some uptick in the economy, accompanied by a sharp fall in inflation of essential commodities and a drop in interest rates on loans for purchase of residential properties, two-wheelers and passenger cars,” the study said.
Despite some money from foreign institutional investors (FIIs) pouring into the stock and debt markets in the recent past, the equity market lacked depth and mid-cap and small-cap shares were in a shambles, the Assocham study said, adding the retail investors were really not enthused about investments in equity.
“It seems erosion in generation of new employment and lack of confidence about retaining the jobs with scores of companies going in for cost-cutting , the demand for discretionary goods, especially on bank loans, is bound to see a further drop.
The Assocham paper said if a stable government was voted into power, the first major turnaround will be seen in the markets, with FIIs focusing on India. This will help narrow the current account deficit and could prompt the government to relax the restrictions on gold imports, which in turn will see a revival in the entire gems and jewellery industry. Beside, better inflows will result in a strengthening of the rupee.