Irrespective of Bihar election results, reforms in India will continue as reviving economic growth will remain a political imperative for both central and state governments, says a Citigroup report.
According to the global financial services major, state election results need not alter the course of reforms.
"Irrespective of results, the reforms could continue as reviving economic growth will remain a political imperative for both central and state governments in power," Citigroup said in a research note.
It noted that since there is a broad consensus on major reforms such as the Goods & Service Tax, improving ease of doing business, "the reforms may stay on course".
The high-stake Bihar Assembly election began today with voting for 49 seats, spread over 10 districts, in the first of the five phases of elections.
"The Bihar election is key to watch given increasing role of state government in implementing structural reforms especially within concurrent list; likely impact on the Upper House, which has 16 seats from Bihar; political momentum & its follow through on other upcoming state elections -- West Bengal, Tamil Nadu, Kerala, Assam in 2016," Citigroup said.
Meanwhile, opinion polls are divided with two suggesting wins for the BJP-led alliance and the other two indicating a win for the incumbent JD (U) alliance. Some are also suggesting a hung assembly with neither side getting a simple majority of 122+ seats, the report said, adding that "irrespective of results, the reforms could continue".
