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Global financial services major Morgan Stanley’s India division does not believe the current political uncertainty is likely to result in an immediate call to polls.
Political parties need more time to prepare themselves; its analysts suggested in an India Strategy report dated March 21.
“Polls are unlikely before December because of the general lack of preparedness of the political class and admin issues around advancing elections,” said the report authored by Ridham Desai, Sheela Rathi and Utkarsh Khandelwal.
The trio added, however, that nothing can be ruled out since ‘politics is the art of the possible.’
“The worst outcome of the new round of political uncertainty, in our view, would be an unfavorable shift in the fisc towards social spending; the best result would be a lift in the pace of reforms,” said the report.
The report noted that BJP is under pressure from within to appoint Gujarat chief minister Narendra Modi as its Prime Ministerial candidate but stated that coalition politics and the need for sensitivity on the part of major parties to the aspirations of their election partners comes in the way of such an announcement.
This is especially true, it said, for the BJP.
“The BJP starts with a big gap to the Congress on the popular vote. The BJP had less than 20% of the popular vote and won 115 out of 543 seats in the 2009 elections. To form a stable government, 200+ seats may be necessary; that would need a vote swing of ~10ppts for the BJP. Such vote swings are rare, even if history is a poor guide, given a fast-evolving electorate,” it said.
