Investors - Be Warned About Early Polls

A leading consultancy group warns investors in India that general elections may take place after the next Budget itself…

 

Asking investors in India to remain alert to possible early general elections next year, financial conglomerate Citigroup has said that the UPA government may go for snap polls after announcing welfare schemes in the next Union Budget.

 

The Congress-led UPA government is facing opposition from the Left parties, which provide the crucial support to the government from outside, to the India-US nuclear deal. “India investors must remain cognisant of potential early national elections, anytime starting 2008,” Citigroup said.

 

Good news for business?

 

In its recent report on ‘India Equity Strategy’, Citigroup said Congress will most likely determine the timing of the polls and not the Left parties as the relations between the groups would get worse when elections get nearer.

 

“The Left parties may indeed be less than certain to repeat their current tally in Parliament and may not be so keen on precipitating early elections, whatever is their public posturing on certain issues,” the report said. The Left parties’ current tally of 60 MPs in Lok Sabha is their best ever and they have rarely had the pleasure of driving central government policies as they do now, Citigroup said.

 

Congress, on the other hand, may feel emboldened by an uncertain BJP and emerging tie-ups with key regional parties (for example BSP in UP), it said. Expecting 2008 to turn out into a national election year in India, the report said that the most probable timing of an early election could be in the summer – around 12 months before schedule – after the government has had a chance to push through more welfare schemes in the Union Budget.

 

Source: Mumbai Mirror