Stability in India after polls is crucial for economy: Expert

Canvas banners printed with logos of Indian political parties are pictured at a processing house ahead of elections in Ahmedabad on March 24, 2014. India has reached government fatigue with the present administration and a sense of stability aft
Canvas banners printed with logos of Indian political parties are pictured at a processing house ahead of elections in Ahmedabad on March 24, 2014. India has reached government fatigue with the present administration and a sense of stability after elections is crucial for its businesses and the economy, said Mr Claude Smadja, an observer of India and co-chair of The Growth Net, a three-day forum being held here. -- PHOTO: AFP

NEW DELHI - India has reached government fatigue with the present administration and a sense of stability after elections is crucial for its businesses and the economy, said Mr Claude Smadja, an observer of India and co-chair of The Growth Net, a three-day forum being held here.

"A change in government might be seen as necessary to revive the energy in the country," Mr Smadja told The Straits Times on the sidelines of the forum. "In every country in the world at some stage when a party has been in power past a certain time, you have government fatigue. India has reached that limit."

"India's economic performance has been sub-par compared with its potential," he said.

While external factors have had a negative impact on the economy, India still could have been doing much better, said Mr Smadja, who describes himself as a foreign observer of India with a long association that began in 1972 when he covered the Bangladesh liberation war as a journalist. Since then, he has been visiting India regularly, sometimes six to seven times in a year.

"There is a need to find, with a new government configuration, a way to revive hope, energies and recreate anticipation after a sense of discouragement that we have seen over the last two to three years, " he said.

The Growth Net is organised by strategic advisory firm Smadja and Smadja, as well as independent non-profit Ananta Centre. It is conceptualised as a platform to create business linkages among emerging economies.

The forum, which began on Sunday, will have a plenary session on Tuesday that focused on India's economic growth.

India goes to the polls from April 7. Its rupee and stock markets have already been rising in anticipation of a new government that will boost growth.

The second half of the ruling Congress party's 10 years in power has been plagued by corruption scandals and policy paralysis.

National opinion polls have been predicting victory for the opposition Bharatiya Janata Party (BJP) led by Mr Narendra Modi, chief minister of Gujarat for almost 13 years. He has been credited for leading the western state to high growth rates and for eliminating red tape for investors.

But polls also say no single party will gain an outright majority in the next parliament, a source of concern for businesses.

Whatever the outcome - whether it is a BJP-led coalition at the centre, or the ruling Congress party returns to power, or the Third Front (a new coalition of 11 regional parties) plays a role - it is crucial for businesses to get a sense of stability, said Mr Smadja.

nilasen@sph.com.sg

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