Impact of 2019 Elections on Indian Economic Sector

Narendra Kumar

13 Jun, 2019

2019 elections has witnessed a significant shift as Indian Politics has received due attention and priority and the dynamics have now changed to build a national record. In 2019, Indian poll battle Indian electoral politics has taken fundamental shifts.

The Sensex has taken a bump and important shift after the exit poll results. As the results of Exit Polls on 19^th May 2019 has predicted an obvious victory of BJP. The rival parties have pointed on Exit polls and EVMs by stating that the Exit polls do not reflect the right position. Opposition Parties have questioned on the system of voting through EVMs and asked for the Traditional voting system, i.e. traditional ballet paper elections.

Indian Market and 2019 Elections

Lok Sabha elections 2019 and the exit poll results have shown a one-sided victory of Prime Minister Narendra Modi, and the response of the opposite parties was depressing. The impact of elections on the Indian market is short term.

On May 19, the Sensex was raised at its highest with single day hike over a decade with 1422 points. The trader, investor and the businessmen, especially Reliance, HDFC and HDFC Banks most of the index gains in Sensex and have created a bullish market.

The day was the highest close for Sensex with 39,353 points and the highlights of the day were:

Wealth Watch

Impact of 2019 Elections on Indian Economic Sector

The conclusion was drawn from the exit polls on Indian economic sector as the GDP of India expands at a slower pace than expected. After the bullish trend in the Indian market, the investor will enjoy the prospect of a stable government and the calculative results of Exit Poll of BJPs Bang on return with the majority can lift the spirit of all the sectors.

In general, taking into consideration both the aspects, the investors are still confused to invest and holding back from making investment with the dilemma that market can take a swing in any direction.

Indian Economy sector and Foreign Institutional Investors

• Foreign Institutional Investors and Indian Economy sector has a direct relation in uplifting the graph of the market. The comeback possibilities of Mr. Modi as Prime Minister has taken a resounding come back of the FIIs in the market and will now make a well-built entry into the market.
• In present situation, the exit poll results have shown uplifting global developments and corporate sector as there was less political uncertainty. The mid Cap and Small cap stocks could expect a visible participation in the market with the appropriate political stability, as these stocks were down in the last 18 months.

• Economy and democracy have a direct relation. The real picture of the democracy can be seen in the economy. Major initiatives and steps have been taken by the Modi government which has witnessed a critical step in the economy after a long time.

Initiatives

Few initiatives are:

• GST (Goods And Service Tax)
• Insolvency and bankruptcy code.
• RERA (Regulation and Development) Act.
• Clean up of non-performing assets.
• Make in India

Highlights of 2019 Elections on Indian Economic Sector

• The elections of 2019 are good sign to transform the agenda of growth in the economy in the next 5 years.
• Positive GDP growth after the exit poll results.
• New direction to the economy on the reforms front implemented in previous 5 years of Modi government get a notable sign in the Indian economy.
• Expected voting figure to claim the government’s stake is less in numbers.
• Subsequent rise in the growth after elections and rise in inflationary conditions.
• Improvement in FPI (Foreign portfolio investment) after elections.

As a conclusion, the ruling and wining party comes in the power and all the money invested during campaign results as return on Investment.

Drawbacks for Indian Economy during Elections

• Costing of elections is very high which somehow affects the economy as well as the infrastructure of the country.
• Vote buying tactics and initiative marked as campaign costs is actually a bribe given by the parties to the general public.
• Large part of the expenses involves in paid political participation during elections.
• More candidature results in uncertain results and expenses

Conclusion:

Due to various corruptions and loopholes found in the administration, government has implemented various reforms to cure the drawbacks and to improve the structure of the economy and for building the steps for a comeback in the elections. Elections are complex and various studies and survey are involved to prepare a questionnaire to execute the process.

Uncertainties are always associated with elections, which makes the potential investor confuse to invest in the market as the market becomes unpredictable. The winning party of Lok Sabha elections will face few challenges like budget deficit, less job opportunities, shortfall in Trade. The basic factors that affect the economy are the stability and consistent work execution.