India hogs limelight

“Both of these are positive and add to the ongoing macro momentum. With state elections done and key bureaucratic appointments in place, we expect reform momentum to continue,” said Citi Research. It said that the state election results are likely to embolden reform momentum and improve BJP’s representation in the RS over next two years.

“Going forward and heading into the budget next year, we expect progress on GST, coal block allocation, resolving labour sector, clarifying monetary policy objectives etc,” said Citi.“Amid all the global financial turmoil last week, one country at least in the emerging market world came out on top: India,” said HSBC. HSBC said that the de-regulation of diesel should offer fiscal savings over time that can be used for more productive uses, such as public investment.

“The BJP’s victories in recent state elections is encouraging and further local gains could help the BJP gain a majority in the upper house over time (though presumably not before 2017). In the meantime, expect more administrative reforms and efforts to improve implementation of existing schemes. Things are looking up in India, gradually but steadily,” said HSBC.

Ind Ra said that the government’s decision to deregulate diesel prices will significantly improve the country’s finances as the oil subsidy will come down by Rs150 billion. “This will create more space for the RBI to ease its policy stance,” it said. ICRA said that the increase in gas prices is expected to improve the viability of a modest proportion of gas resources “though material upside to domestic gas production is likely only after 4-5 years due to approval issues and long gestation period for development of offshore fields”.