麦格理-印度-宏观经济-印度经济：聚集国家大选

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1、INDIAIndiaEconomicsStateElectionCalendarStateelectionstobeinfocusConclusionPoliticalcommentarytotakecentrestagewiththeupcomingstateelectionsinGujaratandHimachalPradesh:Sincethegovernment’stwobigpolicydecisionsofdemonetizationandimplementationofGST,electoralr

2、esultsarebeinglookedattoassesstheacceptabilityofthemeasures.BJP’svictoryinUttarPradeshwasseenasavirtualreferendumonthedemonetizationdecision.Inthiscontext,theupcomingstateelections,GujaratandHimachalPradeshinNov/Dec2017,couldbeconstruedasaverdictontherecently

3、implementedGoods&ServiceTax.Source:ElectionCommission,MacquarieResearch,October2017ConclusionGujaratelectionsmoreimportantfrommarket’spointofview:TherulingBJPgovernmenthasbeeninpowersince1995inGujaratandisPMModi’shomestate,implyingtherewillbegreaterinteresti

4、ntheparty’sperformanceinthestateelections.GujaratelectionstoprobablyseemorecommentaryaroundGST/demonetization:Amongstthetwostates,Gujarathasalargerpresenceofsmall-scalebusinesses/traderswhichanecdotallyhavebeenimpactedadverselybybothdemonetizationandimplemen

5、tationofGST,againincreasingthestateelection’simportance.Votesharetrendsappearfavourablefortherulingparty:BJP’svoteshareinGujarathasremainedsteady(havingdeclinedbyonly1.5%since2002)andthestrongperformanceinsomeofthekeystate/locallevelelectionspost2014generale

6、lectionscreatesafavourableoutlookfortherulingparty.RecentopinionpollfavoursBJP:Indeed,therecentlyreleasedopinionpollbyIndiaTodaygroupindicatesthatBJP’svotesharewilllikelyremainsteadyandthepartyisexpectedtowin110-125seats(vs.115seatswonin2012outoftotal182seat

7、s).ThepollalsosuggeststhatBJPwilllikelygainmajorityinHimachalPradeshwinning43-47seats(ofatotal68seats).Strengthofelectionvictorywillbeassessed:GivenGujaratisaBJPstronghold,marketsmaylookatthestrengthofthevictorytogaugethepoliticalmoodinthecountry.Inourview,t

8、hestrengthofthevictorycouldswaythenarrativeonGSTandtiltofgovernmentpolicies.PossibilityoffavourablestateelectionoutcomealongwiththemegaPSUbankrecapplanmayfurtherkeepmarketsentimentsuppor