CRU: Modi's Second Term Signals Stability for India
LONDON, May 30, 2019 /PRNewswire/ -- On 23 May, Narendra Modi secured a second mandate as Prime Minister.
LONDON, May 30, 2019 /PRNewswire/ -- On 23 May, Narendra Modi secured a second mandate as Prime Minister. The result signals broad continuity for the macroeconomic outlook.
In the near term, we expect continued support for farmers to boost rural consumption and further out we see more fiscal easing. That said, long-standing challenges remain and will continue to hold back India from reaching its full potential.
Election results: landslide victory for Modi and his allies
The National Democratic Alliance (NDA) gained control of the Lok Sabha (lower House of the Indian Parliament), winning over 350 of the 542 seats. The Bharatiya Janata Party (BJP), the biggest coalition partner of the NDA, secured a single party majority with over 300 seats, improving on its 2014 record.
India outlook broadly unchanged
India is currently the fastest growing major economy in the world, expanding at around 7% each year, with downside risks for the current year. We expect growth to continue around these levels in the coming two years.
We expect the February interim budget to be extended to the full budget year. Income support to farmers will boost rural consumption, with 120 million small farmers eligible to receive INR 6,000 per year (initial instalments have already been dispatched).
A fiscal deficit target of 3.4% for FY2020 is unlikely to be met given tax receipts for FY2019 has been lower than expected. Despite this limited fiscal space, we see upside risks to our forecasts coming from continued public spending in infrastructure such as roads.ย
Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2019/modi-s-second-term-signals-stability-for-india/
Read more about CRU: http://bit.ly/About_CRU
About CRU
CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.
Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.
CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia โ our office in Beijing opened in 2004 and Singapore in 2018.
When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.
CRU โ big enough to deliver a high-quality service, small enough to care about all of our customers.
