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Sectors like telecom, real estate, power, mining, oil & natural gas, education and healthcare are highly prone to policy risks contingent upon the outcome of Lok Sabha elections, a study has found.
"The companies in these sectors will have to factor in any policy change arising out of political expediencies as it may affect their business model with the cost being the main differentiator," the study by industry body Assocham revealed.
Besides policy changes, there can be risks from possible adverse court rulings with litigations pending in a host of scam-ridden sectors like coal, telecom and realty. The stock market too would be highly sensitive to the outcome of the general Lok Sabha elections likely in April-May, it said.
The study further highlighted that industry's woes would be compounded in case the country's electorate votes a fractured mandate.
"An unstable government may not take some difficult decisions which the economy while on a downslide may need desperately," it said.
However, sectors like IT, pharmaceuticals, agro-products, automobile, hospitality, etc would not face significant political risks, unless there is political instability.
"With populism being the buzz word and zeal for unearthing scams, businesses today are well-advised to factor in political and policy risks and map their business models accordingly," Assocham Secretary General D S Rawat said.
