Smart Governance
W
IssueInline
Political
economy
to centre
around
elections
hatever the outcome of
Karnataka
elections,
the political-economic
narrative of 2018 and early part of
2019 would centre around either the
impending polls in states like Madhya
Pradesh and Rajasthan or the general
Lok Sabha elections, forcing investors
to adopt a ''wait and watch'' stance,
although sectors focussed on rural
consumption and health are likely
to receive increased opportunities,
an ASSOCHAM note says.
"There is a lot of anxiety around
the high stake Karnataka outcome,
as that is perceived to be setting a
tone for the political situation that
would unfold thereafter. To that
extent, the interest of the business
and industry along with investors
in the financial market is as high as
rest of the segments of the society,"
the chamber said in an internal note
to the stakeholders.
The roll out of Aayushman
Bharat, the national health scheme
that has medical insurance at its
core, would gather traction. "It is a
flagship programme of Prime Minister
Narendra Modi and the rollout is
expected to be big enough, providing
a huge opportunities to the health
insurance service providers, as also
those in the healthcare sector," the
chamber's note says.
It says, just like the previous
governments, the focus would also
be more on the farm sector by this
government as well, especially in
the election year. "With Monsoon
expected to be normal and the
government push likely in the next
few months, the firms in the seeds,
agri implements, including tractors,
fertiliser, pesticides, dairy products
and irrigation equipment would get a
lot more business opportunities than
in the previous few years".
However, the chamber noted
concerns arising from the macro
picture emerging out of the global
factors like rising crude oil prices,
facing increased pressure after US
President Donald Trump pulled out of
the nuclear deal with Iran. "The geo-
political situation in the Middle East
is key to the crude prices as also the
financial markets. With dollar rising ,
India's total import bill in dollar terms
would exert pressure on the country's
current account position as well," the
ASSOCHAM note says.
The run up to the general elections,
after the noisy campaigning for
the states, may divert government
attention from any big time
announcements, but the country's
political economy has become robust
enough to withstand some temporary
disruptions, if any, the chamber noted.
''While there would be
higher level of volatility
in the financial markets
as we further get into the
election mode, the trend
towards resolution of
non-performing assets
through the Insolvency and
Bankruptcy Code would
continue along with the
focus of the government
towards completion of the
key infrastructure projects
including highways and
other roads."
47 | May 2018 | www.smartgovernance.in
DS Rawat
Chamber Secretary General