What happens now to the development agenda? This is the only concern of the stock markets. Election outcomes are always seen by the stock markets only from this narrow prism of self- interest. Markets want events to support its sustenance, there is nothing new about it. What one needs to understand is if the victory of either side in Bihar is going to alter economic policy. The answer is a simple no. Both sides prescribe to the same economic policy. One should remember that the people’s aspiration is firmly fixated on development and their tolerance to “alternate politics” is very limited. The politicians only know it too well. Given that they have a coalition structure on both sides, both sides need to consolidate their positions as development messiahs. So we are only going to see competing development agendas if BJP loses and consolidating development agendas if it wins. The Bihar election sets the stage for the next big election- Uttar Pradesh. While being fixated on a Modi win, stock market observers are failing to see this significant convergence of both sides on development driven politics. This bodes very well for our economy. Then why are markets not showing enthusiasm? The markets are extremely insecure on the future of our economy given the very weak state that it has persisted in. But, what else do we expect of it? The economy was like a patient needing emergency surgery when the Modi government came to power. The emergency surgery was done immediately as they fixed different parts which were almost about to fail. Now, we are seeing a long phase of post-operative convalescence. The economy is slowly regaining its vigour as it is nursed back to good health. This process is going to take a lot of time. Development is the only solution available to bring our economy back to good health and all grass root politicians know it. We should see a more responsible political approach to development in the coming six months. This election is a victory for development politics no matter who wins. Clearly the political narrative is giving way to an economic narrative. Governance is not the sole preserve of any one political party. That is great news for India.
“Forecasting is like trying to turn lead into gold.” – Philip Fisher