Modi will need a lots of allies to return to power

DAINIK NATION BUREAU

Emerging markets guru Mark Mobius says Prime Minister Narendra Modi will not be able to return to power alone after the next general election, and the Bharatiya Janata Party (BJP) will need a lot of alliance support to stay in power.

In an exclusive interview with ETMarkets.com, Mobius said BJP will most likely miss out on the huge majority that it had won in the previous election.

“I think BJP will have to form a coalition to come to power. It may not have the majority that it had in the past,” Mobius, Founding Partner of Mobius Capital Partners, said.

He says the market has already discounted such an election outcome. “That’s the reason we are seeing the current round of weakness,” he said.

As a disclaimer, Mobius however warned he could be wrong on the election results. “You will see some changes take place, which will benefit the common people in India. The budget impact and the GST effect will all trickle down. Also, I think a lot of infrastructure development has been taking place, which the BJP has not been promoting so much,” he said.

Domestic equity benchmark Sensex has witnessed a continuous slide for nine straight sessions till Tuesday, logging its longest losing streak in eight years, thanks mainly to poor December quarter corporate earnings, geopolitical tensions and uncertainty ahead of the forthcoming general election.
Sensex has lost some 4.4 per cent during this period.

Asked if he would still be confident on India if Modi does not return to power or returns with a weak coalition, Mobius said his assessment would be less positive. He, however, added even that scenario could throw up positive surprises.

“One interesting phenomenon is, let’s presume the Congress gets much stronger results than we expect, but if that happens, you may still see some changes,” Mobius said, adding that the Congress might opt for driving up reforms as well. economictimes.com