The Hindu : National : Corporates not worried about Congress forming government

Online edition of India's National Newspaper
Thursday, May 13, 2004

National

National

Corporates not worried about Congress forming government

By Our Special Correspondent

NEW DELHI, MAY 12 . India Inc was not worried about economic reforms being slowed down in case a Congress-led coalition came to power, according to the Confederation of Indian Industry director-general designate, N. Srinivasan. The main interest of most corporates was whether the Government was stable and could continue for the full five-year term, he told The Hindu .

Political parties have recognised the fact that the reforms were crucial for the growth of the economy and any coalition assuming the reins now was not likely to slow down this process, he said. According to him perceptions about the crash of the stock markets in the last few days being due to prospects of the NDA coalition not forming the Government were not correct.

First, he pointed out that India's bourses were now globalised and reacted to events beyond the borders. The reaction of the stock markets yesterday was not only due to the poll results in Andhra Pradesh but also because Asian stocks plunged as a result of fears that U.S. interests may go up. It was the biggest drop in Asian stock markets since the attacks of September 11. Second, last week's bear run was largely owing to fears of an unstable combination forming the Government rather than concerns over one party or another. And third, he expected the markets to bounce back mainly because the economic fundamentals were sound at the moment. The manufacturing sector was showing good performance while agricultural output was also expected to rise significantly this year. GDP growth estimates were looking up and the stock markets would ultimately reflect the improvement in the economic outlook, he said.

Printer friendly page
Send this article to Friends by E-Mail

National