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Epic battle shaping up in Indian polls
Canadian NRI, Jayaram Singh has been working on his plan to establish a medical devices assembly plant in Northern India.
He was scheduled to sign a joint venture deal this month.
“I think now I am going to wait until after the election,” he said
Like him, the bulk of foreign investors are adopting a wait and see attitude as the world’s largest democracy prepares for a poll that will see a massive change of leadership said, a survey by industry body Assocham today said.
"Potential investors would like to wait and watch till the general elections, owing to uncertainty about the unfolding political direction," it said in a statement.
Majority of the respondents of the survey stated that investors have put their investment plans on hold for now. About 1,200 corporate executives participated in the survey.
The Lok Sabha elections are expected to be held in May. Citing example of multi-brand retail trading, it said that global retailers like Walmart and Carrefour are unlikely to enter the supermarket business in India before the 2014 general elections.
"In the case of multi-brand retail, the concerns are there regarding the political stand of state governments. Most of the states have expressed their opposition to the FDI policy, except the congress-ruled states," it added.
The wait and see attitude is being adopted as Canadian businessmen, politicians and universities have been busy inking deals and setting up trade partnerships to boost the current US $5 billion trade with India to US $15 billion by 2015.
This election will see an epic battle between the ruling Indian National Congress and its allies versus the Bharatiya Janata Party (BJP) with the controversial Hindu nationalist Narendra Modi at its helm. The Indian National Congress has been in power for the past decade under the leadership of the Italy-born Sonia Gandhi and her son Rahul, heir to the Nehru-Gandhi dynasty.
The US intelligence community believes that any post-election Indian government will probably have a positive view of the US, but it's "not assured" that future legislation or policy changes would be consistent with American interests.
Similar sentiments were echoed by Canadian investors looking at India.
“It’s an unsettled time right now to make long term decision involving direct investments in India,” said a Vancouver-based analyst who advises major mining corporations.
"In this election year in particular, coalition politics and institutional challenges will remain the primary drivers of India's economic and foreign policy decision making," Director of US National Intelligence, James Clapper, told a Congressional panel.
"Coalition politics will almost certainly dominate Indian governance," Clapper said noting "since the 1984 national elections, no party has won a clear majority in the lower house of Parliament."
"We judge that this trend will continue with the 2014 election, and the proliferation of political parties will further complicate political consensus building," he said.
In an era of coalition politics, the rise of regional leaders and local political parties is also crucial in India, reported CNN. While it's difficult to predict winners when there are numerous unknowns, it listed five factors bound to influence Indian voters in 2014.
1) Corruption
It's so ingrained in almost every aspect of daily life that most Indians have long tolerated and gotten used to small-scale corruption.
However, after a series of multimillion- and even billion-dollar scams, brought to light by an unrelenting media, the fight against corruption has reached a tipping point in India.
In New Delhi's recent state assembly polls, the stellar performance by a brand new political party founded on an anti-corruption platform was unprecedented. Both houses of the Indian parliament subsequently passed landmark legislation in December to create an anti-corruption ombudsman with the power to investigate graft at the highest levels. How it will be implemented is yet to be determined, but without a doubt, the prevailing anti-corruption sentiment will continue to have major ripples in 2014.
2) Youth
Much is said of India's untapped and vast youth potential.
In 2014, first-time voters will account for almost one-third of the electorate. These young adults grew up in an India reveling in near double-digit growth rates. A recent economic downturn is shaking things up politically, although the influence this will have on youth voters remains unclear.
What moves Indian youth to act is unpredictable, as manifested in the stunning outpouring of support for the victim of a vicious gang rape in New Delhi in 2012. But increasingly, young people appear to be shedding their indifference to politics, and this crucial voting block cannot be ignored in 2014.
3) Religious violence
In September, India had the worst case of religious violence since the Gujarat riots in 2002. More than 60 people, mostly Muslims, were killed and tens of thousands displaced along religious lines in Muzaffarnagar, a district about 130 kilometers north of New Delhi.
In a country founded on the principles of secularism, there's growing fear over what the re-emergence of religious tensions could mean for the country's politics. With the rising popularity of the opposition's candidate for prime minister, the Hindu hardliner Narendra Modi, there are concerns he'll adopt a polarizing strategy to win votes. Analysts say political tensions could also mount as political groups opposed to Modi try to paint him as a radical.
The long-running election strategy of dividing communities for political gain could be an ongoing political tactic in 2014.
4) Inflation
India's economic slide may have bottomed out and growth is conservatively expected to rise to around 6% in 2014, but the common man continues to be deeply affected by inflation.
For most of 2013, consumer inflation hovered around 10%. The outcome of the recent state elections in which the ruling party suffered a massive blow was partly on account of rising prices. The chief of India's central bank has made taming inflation his top priority, but the impact of recent monetary tightening measures may not be felt in the short term. Inflation, then, could remain a critical factor in the national elections.
5) Rise of states and regional parties
India's economy slowed in 2013, but one of the main reasons the economy hasn't come to a standstill is that growth in several of India's 28 states continues to rise at unprecedented levels. In the once impoverished state of Bihar, for instance, the economy grew at 14% in 2012-13, in Madhya Pradesh 10% and Odisha 9.14%. These states were never India's engines for growth.
Economic power translates to political clout, and as the central government is becoming weaker, the states are becoming stronger. This shift is so substantial, states and regional parties can now dictate national and international policies. How these regional parties fare and which coalitions they choose to join will have a massive influence on the national elections.
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