Global financial biggies catch India poll fever

Tags: Economy
Showing a strong global interest in India's general elections, over a dozen global financial giants, including Goldman Sachs, HSBC and Citigroup, are keeping a close tab on these polls and are analysing the likely economic impact of different possible outcomes.

The unprecedented interest shown by these international financial services firms in the ongoing elections, which is the biggest ever electoral exercise in the world, largely stems from India's emergence in the last few decades as a major centre -- both politically as well as economically -- on the global landscape.

These firms also include Bank of America Merrill Lynch, Nomura, Barclays, UBS, CLSA, BNP Paribas, RBS, Deutsche Bank, Credit Suisse, Morgan Stanley and JP Morgan.

India, which has a huge market thanks to its large population, is expected to become the third largest economy globally in the next few decades. A change in leadership at the Central level, along with changes in policies of the government, will have a direct repercussion on global front.

Most of the global financial services majors believe that Narendra Modi, the Prime Ministerial candidate of the BJP, is a clear front runner and describe him as more business friendly, shows an analysis of surveys conducted by these firms for internal use and for the benefit of large clients.

The observations assume significance as they come at a time when a political debate is underway on the comparison between so-called growth model of Modi-led Gujarat and that of other states ruled by Congress and other parties.

BJP is trying to wrest power from Congress at the Centre.

Giving a thumbs up to the Gujarat business model, a Goldman Sachs study said that 40 million new manufacturing jobs can be created in a decade if states follow flexible labour laws like in Gujarat.

In November 2013, Goldman Sachs had came under sharp attack from government and the Congress over upgrading Indian markets on a likely Narendra Modi election win.

Analysing the Indian elections, economists from leading foreign fund houses like Credit Suisse, BNP Paribas and Bank of America Merrill Lynch said that Indian economy is much more dependent on the global economic cycle than who rules in New Delhi.

Economists have broadly listed four post-poll scenarios and their possible repercussions on the Indian market. The four scenarios are -- Modi-led NDA government with two-three allies; Modi-led NDA government with five-six allies; other leader led-NDA government with 8-10 allies or a Third Front government supported by Congress.

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