With political stability secured, no worry for the economy: IIFL’s Nirmal Jain

livemint.com:

will win at least 350 Lok Sabha seats in the just-concluded national election, making for a clear majority in Parliament that would allow for policy and fiscal continuity. When the Election Commission of India announces the voting results on 4 June, the markets will be tracking the margin of victory for the NDA, and not wondering about a possible loss, said Nirmal Jain, founder of financial conglomerate IIFL Group. The government that takes charge once the results are officially announced has its task cut out, Jain said.

In an interview with Mint, Jain said the new administration should accord priority to labour reforms, the electricity Act, increased privatisation of public sector undertakings, and support for manufacturing. “The new government is expected to implement ambitious new laws, tax reforms, incentives, and trade agreements to further support manufacturing," he added. Jain also offered insights on why foreign portfolio investors are selling Indian stocks, and on sectors that make for attractive investments this year.

Edited excerpts: The exit polls show a majority for the BJP, and close to 350 seats for the NDA. This augurs well for the economy as political stability is key for continued thrust in infrastructure and inclusive growth. The surprise can only be in terms of the number of seats won by the NDA.

As long as the BJP/the NDA form a government with a clear majority, we do not have to worry much about the economy and growth. India’s economy grew at a faster-than-expected pace of 7.8% year-on-year in the first three months of 2024 (January-March), driven by a strong performance in the manufacturing sector. Economists expect this momentum to continue throughout the year.