The Hindu Business Line : Stability factor

THE results of the Lok Sabha elections are certainly unexpected but in no way express any mandate against the economic reforms. The Congress-led alliance and the Left together account for a safe majority in the Lok Sabha and this augurs well for the stability of the new government since the smaller parties will not be in a position to bargain

The Congress-led coalition is in a position to give a big push to the economic reforms and maintain the growth tempo. The Congress initiated economic reforms and with Dr Manmohan Singh and Mr P. Chidambaram expected to be in the new government, it is natural that the policies will be channelled in the right direction.As for the Left, the CPI(M) has been in power in West Bengal for the last 27 years and, in the last two years, the State government has been initiating a number of reforms and bringing in investments to the State.

The Left is also reconciled to integrating with the global economy, though there can be some variance with the Congress in emphasis.

The disinvestment policy will be fine-tuned and there may not be the strategic sale of the blue-chip public sector companies, including those in the oil sector. But the most important point is that the farm sector will get a big boost.

The dominant position of the Congress in the new government is the guarantee that the reforms process will continue and the eagerness of the Left to keep the BJP out of power, is to sustain the stability of the Congress-led government. The stock market is sure to recognise this new reality and will get back the confidence.

(The author is former Chairman, Ernst & Young India.)