Lok Sabha Elections 2024: What to expect for economy if Modi wins? UBS analyses possible scenarios
Also Read: Inflation to ease, FY24 GDP growth seen at 6.6%: Kotak Bank chief economist Upasna Bhardwaj “The recent performance in assembly elections suggests that: a) the ‘Modi factor’; b) the perception of the work done; and c) implementation of welfare programmes worked in favor of BJP. The government has refrained from turning populist and remains on the fiscal consolidation path in the run-up to the 2024 election," the UBS report said.
UBS looks at three possible scenarios: a) BJP single-party majority; b) BJP-led coalition; c) weak coalition led by INDIA alliance. Its discussions with investors and valuation multiples suggest the first two outcomes are largely priced in by the market.
In the first scenario, UBS expects the government’s focus will be on policy continuity which bodes well for business sentiment and much anticipated private corporate capex recovery. “According to media reports, BJP seems to be already working on a 100-day plan for immediate steps be taken once the new government is formed for the 'Viksit Bharat 2047' (Developed India) plan's quick execution.
In addition, the implementation of supply-side reforms could pick up including clean energy transition, increase in infrastructure spending (both digital and physical), manufacturing push and other targeted policy initiatives (towards youth, poor, women and farmers)," it said. Also Read: There may be no US Fed rate cut in 2024 as inflation remains sticky, says Madhavi Arora of Emkay Speaking on the impact on different reforms under various government scenarios, Jain expects that with the BJP being the single-largest party, fiscal prudence will be maintained, infrastructure will get priority, the digitalization push will accelerate, while the
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