Growth, Reforms, and Investments: The Road Ahead for Indian Stock Market.
The suspense surrounding the formation of the government, whether it will be led by the ruling BJP or the opposition Congress alliance, will be resolved on June 4, 2024, when the vote count is completed. While media speculation is rampant about the ruling party retaining power, we will refrain from conjecture and focus solely on the stock market implications. Historically, economic reforms have continued irrespective of the ruling party, leading to sustained growth, which is favorable for the stock market. Both the BJP and Congress have pledged growth and infrastructure investment in their manifestos, indicating policy continuity. Following the government formation, attention will shift to the next budget, anticipated in late July 2024. Under the NDA regime in FY20, the fiscal deficit surged to 9.17% due to increased post-COVID spending but has since been improving. We expect the fiscal deficit to fall below 5% in the medium term. Additionally, a significant transfer of Rs. 2 Lakh Cror...