The election verdict in Uttar Pradesh which gave Bharatiya Janata Party a landslide majority in the state will give an added impetus to reforms in the country, says a research report by Deutsche Bank.
“Our view was that reforms momentum will continue, irrespective of the state elections outcome, and the recent state election results have made that conviction even stronger. “said a note by its senior economist Kaushik Das. “India has embarked on a journey to
transform itself into a STAR (simple, transparent, affluent and resilient) economy, and the progress so far has been promising.”
The goal should be to try and maintain the ongoing reforms and focus on new reforms,
which would be beneficial for the economy from a medium to long term perspective.
Despite what has been achieved in the last few years, there is a lot of scope for incremental
improvement, both in terms of India’s own potential and also in comparison to other merging
“We hope the authorities will push harder in the coming years to ensure that most of the medium-term objectives are met” the Deutsche bank note said.
“Overall, we remain positive on the medium-term macro outlook of the Indian economy, with political and macro stability being in place, and the state election results putting the central government in a comfortable position to continue with the reforms agenda.”
Deutsche Bank note also points that the BJP’s victory in Uttar Pradesh, which was the main focus of investors and markets, was particularly impressive, and will help the party to improve its seat strength in Rajya Sabha next year, when 10 seats fall vacant in that state.
The government is expected to remain focused on measures that will help to improve the ranking in terms of ease of doing business substantially and persistently in the period ahead. Implementation of the GST from July will simplify indirect tax structure, reduce geographical fragmentation and broaden the tax base, which will prove to be transformational for the Indian economy in the medium term.