Election verdict 2019: Markets, India Inc. cheer Modi’s second term

The Sensex jumped more than a 1,000 points breaching the 40,000 mark as the BJP-led National Democratic Alliance took an early lead in more than 300 seats in the 2019 Lok Sabha Election results, indicating a return to power for incumbent Prime Minister Narendra Modi.

Here are reactions from India Inc:

Gautam Adani, chairman, Adani Group

Our nation's biggest strength is its democratic fundamentals and the prudence illustrated by the electorate augurs well for India. Moving into the next level of development requires focus on large scale infrastructure growth, reskilling of the workforce and deeper penetration of technology.

Aditya Ghosh, CEO, India & South Asia, OYO Hotels and Homes

The Indian General Elections is the biggest testament to the power of democracy in the world. Irrespective of the political divide, we hope for a new beginning of inclusive growth, which helps the common man; renewed vigour in creating more opportunities for all; progressive thought and reforms that enable growth and entrepreneurship; and, drive maximum participation of young people.

Tulsi Tanti, founder, chairman and managing director, Suzlon Group

The entire country has reposed its faith in the governance and strong leadership of Mr Modi. We look forward to NAMO 2.0 government deliver on its promises by spearheading the growth of agriculture sector, social sector and industry with dynamic policy changes which will fuel overall economic growth, energy security, Nation building and job creation. We are confident that the Modi government will ensure ease of living, ease of doing business, and make India clean, green and safe country.

Pawan Goenka, MD, Mahindra & Mahindra:

The decisive mandate is perhaps even more decisive than most staunch supporters of BJP+ would have expected.   This augers well for the country because this is a reconfirmation by the country on the direction that the Govt had taken in its first term, allows continuity of this direction, and allows the Govt to complete its unfinished agenda.  We all wanted a strong Govt with a decisive mandate from the people to allow them to take bold decisions and we have it.  Next 5 years can be golden years for India provided the Govt, the industry and the civil society work together.

The inclusiveness of the growth, the rural reform agenda, the infrastructure development agenda clearly have to remain in front and not be compromised with but this in itself will not be enough to give us the double digit GDP growth.  Immediate job for the Govt in my opinion has to be getting the consumption cycle going which has been on a pause mode for the last several months, supposedly because of the elections.  Stimulus of Govt spending will be required and I hope the next budget will focus on this short term aspect.  Moving beyond the short term, I believe one of the initiatives of the govt in its first term which got slightly on the back burner because of other priorities was ‘Make in India’.  If we want a trillion dollar manufacturing economy lot more will have to be done for making Indian manufacturing more competitive – cost of manufacturing has to be focussed on which includes, cost of money, high corporate taxation, logistics cost and need for labour reforms.  One of the biggest long term concern for India has to be job creation and therefore industries that generate jobs must get higher priority.  Reskilling will require some bold moves.  Manufacturing cannot become strong unless it is backed up by strong technological backbone, where India is lagging compared to other developed nations.  This requires a strong focus.

This Government can now afford to be very bold and do all the things that it knows are right things to do without having to worry about any political fallout.  The decisive mandate gives them that luxury.

Anand Kripalu, managing director and CEO, Diageo India

A stable government is indeed welcome for the nation and economy. We hope that the new government will reinforce its progressive policies towards industry, and usher in the next phase of reforms to promote ease of doing business and ‘Making in India’. We also look towards the federal government to encourage states to urgently bring comprehensive regulatory reform into key state-GDP contributing sectors such as alcoholic beverages.

Pramod Chaudhari, executive chairman, Praj Industries India

I expect the new government to take up economic stimulus and growth as a priority agenda. As a result of the prevailing geopolitical situation, there is a sense of skepticism, especially owing to the rise in crude oil prices and flagging trade wars. New government should de-bottleneck and accelerate the implementation of progressive Bio-fuels policy. The government should oversee fulfillment of ethanol blending mandate of 10% and also eco-system development to set up Compressed Bio Gas (CBG) plants in line with SATAT policy. This will not only facilitate energy self-reliance but also help combat environmental issues such as air pollution. Inclusive growth by way of bolstering the rural economy by encouraging agri-processing industry and Job creation is another important area that needs look in. New Government should continue on the path of focusing on technology & innovation and measures to sustain entrepreneurial start-up ventures. Ongoing focus needs to remain on critical matters related to national security, furthering exports and reinforcing the confidence of global investor community in the Indian economy.

Sunil D’Souza, managing director, Whirlpool India

The Indian voter has voted for stability this time around. While in the short term we expect to see stronger market sentiment and renewed consumer confidence, in the longer term the continued thrust on the reform and growth agenda bodes well for the long term consumer story in India.

Puneet Dalmia, managing director, Dalmia Bharat Group

“It’s a victory for nationalism and Indian pride. Now no one can stop India from becoming a military and economic superpower. The results are a clear indication that the country and its people are all for progress and stability.”

Harshil Mathur, CEO & Co-Founder, Razorpay

"This government has had a very strong focus on Digital India and FinTech, and we are happy that they will continue to do so. A lot of programs were initiated towards digitisation of the country and increasing access to fintech last year - this must progress with a fresh commitment to democratise digital payments. The impact of GST should bring more people into the tax bracket. One reform that I am expecting is the tax and GST benefit for businesses opting for digital transactions. We were looking forward for this to happen last year, however, hopefully, the government will do it this year."

Mihir Vora, director & chief investment officer

The clear mandate removes a big overhang of uncertainty over the markets. An incumbent with a large majority winning again in a big way is a historic milestone. This is a significant positive for market sentiment and for attracting global investors.

However, given the ongoing domestic slowdown, stress in finance companies and global uncertainties like Iran , China trade negotiations and Brexit, the new Government will need to hit the ground running.  The announcement of the cabinet and key initiatives to kickstart growth will be keenly watched by the markets.

Rajesh Cheruvu, chief investment officer, WGC Wealth

“The watershed 2019 Indian election has thrown a decisive mandate yet again in favour of the incumbent, this is the first ever non-Congress government re-elected in Indian electoral history. As a result, the new government will have the ability to pursue the economic reforms initiated in the past five years. Such a strong mandate should ensure continuity of policy, undertake further structural reforms and likely boost business and consumer sentiment and in turn to revive economic growth yet again. This may lead to a medium term up-move in the equity markets. But, fundamentally, stock prices should respond to valuation multiples and earnings growth. In the Indian context, the latter has been missing for many years.”

Sunil Rathi, director, Waaree Energies

"We look forward to the newly elected government's solar implementation policies and are confident that renewable energy will be a key dimension in their vision as projected in the Interim Budget. While we have seen some movement in the last year, with the implementation of Safeguard Duty, de-linked manufacturing tender and KUSUM scheme being introduced, we expect the Government to continue their support with primary focus on domestic manufacturers. As the Safeguard Duty, which brought about interim relief in the industry, is expected to expire within the year, we believe that the much anticipated Anti-Dumping Duty on solar modules is need of the hour. The KUSUM scheme has already seen tremendous success with the installations of over 30 million agricultural pumps and over 20 million grid connected water pumps.

Taking cue from the recent developments, we believe that the primary focus would be on reducing the import of solar equipment from foreign countries such as Thailand, China and Vietnam, thus strengthening Rupee denomination and contributing to the nation's GDP. Moreover, key focus on the adoption of solar solutions by the transport sector, specifically electric vehicles, is expected to yield results. With technological evolution leading the sustainable efforts of the country, we are confident that when implemented, the Govt. will help attain energy security and generate employment.

Ramaswamy Venkatachalam, managing director - Banking and Payments, FIS

Indians are at the forefront of driving the global digital revolution, the number of internet users in India is growing at an enormous rate with close to 500 million internet users today. With government’s robust efforts of providing platform for digital marketplace, it becomes imperative for the fintech firms to focus on safe and secure transactions, fraud prevention and ensuring privacy of personal information. In addition, a serious and continued emphasis on cyber security, financial inclusion, customer protection and education, and free market competition will help empower the entire population with exceptional payment experience that matches with best in developed countries.

Lav Kumar, head, product & business development, LIC Mutual Fund

“The general election results are almost out now and the electorate has given a clear & decisive mandate to Prime Minister Modi. It is very important to have a stable government at the centre which can derive the country into a strong economic growth. The pace of much needed reforms in various sectors will gain pace & the growth rate will accelerate.

We believe the Indian economy in 2019 will keep growing faster than 2018 due to the demographic young population and their demand for better lifestyle, goods and services.”

Surendra Hiranandani, founder and director, House of Hiranandani

“The real estate sector was in the news in the last couple of years, with the government announcing several major policy initiatives like demonetization, RERA, GST etc which changed the entire landscape of the industry and made it buyer friendly. Housing remains the top priority for every Indian regardless of their income levels, education or any other possible factor and we believe that a stable government at the centre in 2019 will further boost the growth in the sector. We hope that the new government demonstrates concrete action to push investments, increase growth and generate employment.

We expect that the new government can do away with unnecessary documentation which will help real estate players immensely. It is important that single window clearance is soon put into practice which will not only resolve operational issues prevalent in the industry, but would improve the productivity of the real estate industry. Currently, the permissions are coming at a snail’s pace. Private sector participation in housing is necessary to bridge the gap between demand and supply and for that it is desirable to create policy framework to minimise and simplify approvals required for development of a real estate project. Real Estate sector stands amongst the critical sectors in terms of investments and employment and we look forward to initiatives that would further aid to the growth of the sector in the near future.”

Navtej Singh, CEO, digital business, Hitachi Payment Services

“It is our belief that the (new) government will take steps to further strengthen the fintech ecosystem in India. With the consumer in mind, the government should introduce regulations that are flexible in nature and benefit multiple stakeholders. While regulations like sandbox and ‘no-compromise’ approach towards safety will further drive innovation and security in the fintech space, a more market driven approach towards pricing, the timelines to implement the norms and flexibility would be equally important. The push towards more convenience, cost effectiveness and adoption of technology that make lives easier for every Indian citizen such as UPI, IMPS etc. should be the topmost priority.”

Himanshu Pujara, managing director, Euronet Services India

“A right mix of policies, regulation and incentives are required to further the fintech space. The Government thus far has been extremely supportive by promoting the platform for real time and faster payments, creating an environment that has let to huge investments in the fintech space which has allowed mushrooming of several hundreds of start-ups who are enabling innovation. Going forward the government has to ensure that policy and regulation have a coordinated run with industry requirements and innovation to foster creativity, new investments and secure growth of the sector.”

R. K. Gurumurthy, head, treasury, Lakshmi Vilas Bank

The final outcome of general election 2019 came in with an overwhelming verdict in favour of the ruling party. While there was little doubt about the verdict, the landslide victory margin is an endorsement of the faith the populace had in the ruling government.

The results will reinforce the conviction of the investor community in India’s reforms and growth.  After the initial euphoria, markets may see some profit taking and remain somewhat volatile until we have clarity on who will hold key portfolios in the new ministry.  Financial markets will turn focus soon over the RBI MPC in early June as measures for improving liquidity in the system and addressing issues relating to weak growth in a low inflationary environment are anticipated. Key concerns are how the Fiscal Deficit will pan out. Against a backdrop of tepid, trade-war ridden global economic growth scenario, it remains to be seen how we will move out of the 7-8% range into a higher platform. The strong majority arising from the poll-verdict would pave way for second round of reforms and economy would therefore benefit immensely.