Goldman Sachs report predicts NDA win

MANDATE 2004

The BJP-led National Democratic Alliance is expected to begin a second innings at the Centre, and maintain the reform momentum generated during its last term, according to the second Goldman Sachs' BRIC report.

"Even though both the BJP and Congress are pro-reform, the Left leanings of the allies of the latter could affect the pace of reform under a Congress-led coalition," the report says.

The report has based its analysis on the three major opinion polls held before the elections. It says the ruling National Democratic Alliance (NDA), which is in power since 1998, is likely to win the majority of seats, setting the stage for another five-year term for the current administration.

The report, which explores the growth potential of the BRIC countries comprising Brazil, Russia, India and China, indicated that India still had a lot of catching up to do with countries like China, which are 10-15 years ahead in the reform process.

On the pace of reforms, it says both Goldman Sachs and the market expect a continuum of the same, as both the mainstream national parties, BJP and the Congress are pro-reform.

But it also states that labour reforms continued to be an area of concern for India. Another disturbing factor was that despite substantial reduction in import duty rates and pruning of the number of slabs and exemptions with respect to excise duties, the average rates in India were still higher compared to other countries.

In agriculture, too, marketing of produce was yet to be freed even as controls over movement and storage of agricultural produce were lifted. In areas like privatisation, future course of action depended on the next government, according to the report.