Indian firms want a non-Left government
By siliconindia   |   Friday, 15 May 2009, 15:43 IST   |    2 Comments
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Indian firms want a non-Left government
New Delhi: Indian companies has shed a sigh of relief as it has almost become clear that the new government at the Center will be formed by either Congress or BJP, as per the exit poll result. India inc's main worry was that the Third Front, with Left parties playing an important role, will form a government, reported The Times of India. Goldman Sachs said that the worst fears of the market, that Third Front will play a major role in the new government, will be removed if the exit polls results come true. "However, the fear of Left playing some role in the government exists. The best scenario would be a government without any Left representation," it said. A senior industrialist, who did not want to be quoted, said though the picture so far was not very clear, it was expected that either Congress or BJP-led coalitions would form the government, a preferable option in the present scenario. For Citigroup, a coalition led by the Congress or BJP would be the best outcome of the poll. "A combination with the Left could put reforms on the back-burner, while a non-Congress or non-BJP coalition would have more implication for stability than policy," it said in a report. Another concern of the Industry captains was the stability of the new government. Manoj Vohra, a senior consultant of Economic Intelligence Unit, said as Congress-led UPA is more acceptable to small parties, it is likely to provide more stable government than by BJP-led NDA. He said as economic reforms have already entered into an irreversible phase, the policies would remain more or less same, irrespective of the combinations that will form the government. But, the issue of stability will affect the sentiment if an unstable combination forms the government. Goldman Sachs thinks that if a stable government comes to power, markets would be driven by fundamentals and global cues. In that event, leading indicators suggest a recovery in economic activity in the second half of 2009-10. The economic activity has increased immediately after five elections out of seven since 1984, when a stable combination formed the government.

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