Subscribe to the BlogThe Indian economy has gone into general elections to elect the central government for the next five years, in the last six weeks. The predictions by all the leading TV channels and News agencies indicated a hung parliament with no clear majority for any of the two leading parties.
But the actual results have been a total surprise to everybody including the winning Congress party. The ruling coalition has been able to get the magic majority mark without any issue and the oldest congress party has been smartly adding up new friends to strengthen their dominance.
These things only indicate that India is heading for a stable government for the next five years and given the dominance of the Congress party in the coalition, many analysts are expecting acceleration of economic reforms. The stock markets have been able to sense something of that sort, and have registered an impressive 20% spike up in the first two days after new government formation.
The Foreign institutional investors had put over 20 billion US dollars worth of money into the Indian market, in both debt and equity. Few of the major investors had pulled out of India few months back fearing unstable government at the center. But the election results have forced all these foreign investors to rush back to India with their investments.