The Hindu Business Line : Poll results totally unexpected, say Dubai NRIs

THE NRIs in the UAE have termed the results of the Indian elections as "totally unexpected" and a consequence of the anti-incumbency sentiment driving voters' choices, but many expressed concern over the impact it may have on India's economy in the short term.

A new Congress-led Government's incapability to take bold initiatives on the economic front because of its dependence on smaller parties could come in the way of pursuing a forceful economic agenda, said Mr Suresh Kumar, General Manager, Emirates Financial Services of the Emirates Bank Group. "The real impact will be seen through this dependency factor. We hope that the more pragmatic elements in the supporting parties will have their say to push forward economic reforms."

The investment climate could also be affected to some extent as overseas investors adopt a wait-and-watch attitude, but the domestic corporate sector, which registered double-digit growth in the last quarter, could continue its positive growth, Mr Kumar said.

This is mainly due to the fact that the Indian economy is now largely insulated from political developments in terms of some basic fundamentals, he added.

However, there could be a clear shift in the new Government's policies from issues like liberalisation and divestment towards the rural sector and infrastructure projects such as power and roads, which will also benefit the economy, he said.

Leading Abu Dhabi-based businessman, Mr B.R. Shetty, of the NMC group, said that the election results are a clear indication of the voters call for change, be it in the Centre or States.

"The Indian economy is resilient now and may not be affected greatly by the changes."

The presence of Mr Manmohan Singh in the Congress could result in continuity of the reform agenda which he is reputed with initiating over a decade ago, he added. Dubai-based prominent businessman and former President of the Overseas Indian Economic Forum, Mr Ram Buxani, was quite forthright in his views.

Stating that the outcome was a real shock, he said that after five years of economic progress and a successful foreign policy, the BJP did not deserve such a treatment.

He was quite surprised in particular by the losses suffered by the TDP and Congress in AP and Karnataka respectively, stating that the entire world was aware of the contribution of these two States in the field of IT.

Mr Buxani indicated that the economy could suffer in the short term and this could have a negative impact on FII investor confidence.

Mr Kiran Sangani, General Secretary of the Indian Business and Profession Council, Dubai, said that change is always for the better and that the poll results would bring in younger leaders who will induct new ideas.

"It is the people's verdict. The BJP neglected the rural sector and paid the price for it. If the new Government does not succeed in implementing its promises, they know they will also be voted out. The good thing is irrespective of the party in power, there can now be no going back in the reforms process and liberalisation will continue."