Deutsche Bank, however, also said it is not going to get carried away by the current wave of optimism. "Our optimism rests instead on the fact that tough measures, such as fuel price hikes, monetary and fiscal tightening and FDI liberalisation have been taken over the past 18 months that will hold India on strong footing regardless of the election outcome," it said. The report said that in the past one or two decades, the election cycles have come and gone, and markets have rallied exuberantly in the lead-up or aftermath of decisive electoral results.

"These rallies have almost inevitably fizzled though as the reality of running a large, complex, and noisy democracy set in," it said. Deutsche said it is encouraged by prospects of the domestic economy and just doesn't have a strong view on which party can deliver more than the other. The report further said it expects India's current account deficit in FY15 to be higher than this year ($50.5 billion against $36.6 billion), on the back of stronger imports growth (10 percent y-o-y in FY15 as against 5.3 percent likely in FY14). "As restrictions on gold imports ease and economic momentum picks up, imports growth will turn positive and raise the trade and current account deficit," the report said. It, however, did not expect gold imports to increase as sharply as in FY12 and FY13, to lead to renewed concerns on the current account gap front. On the rupee, it said the currency is not seen breaching 61 on a sustained basis, as it expects the Reserve Bank to intervene and buy dollars below those levels.

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