A Year Of Hung Business Sentiment?
Forget Cricket, the one game India is likely to play over next one year is politics! The elections for Karnataka Assembly are on 12 May and the fate will be clear by next Monday, 15 May. The game is likely to begin next then and it will be on for one year. Really long. The question to ask is whether India can afford such long recesses from her core agenda of growth. Or that the businesses have mastered the art of staying decoupled from the political heat and dust. As I write this, the political rhetoric by both contending parties seem to be focused on running each other down with no specific individual attribute as a promise. This is sad for the people of Karnataka. And if this becomes the flavour in parliament elections next year, it will be sad for the nation.
What it can potentially mean is that the polity is vertically divided and there is a hung representation. A hung floor of legislative assembly generally means a hung business sentiment too.
The opposition parties, on either side of political divide, have not let the Parliament function properly for past six years now. Imagine the mayhem if either of the political dispositions do not have a clear majority! Truly, everyone will be affected. Staying glued to your TV set next Monday morning to see news unfold in Karnataka, seem to be a good idea.
Observing the movement in Indian Stock Exchanges through this week will be an interesting exercise too. The India Economic Story and India Political Story is likely to be played out. In the Primary Market, two IPOs have dared to open during next ten days. One, a smallish Issue, to be listed on the main boards of BSE and NSE, ends a day before the elections in Karnataka and the other a largish SME Issue opens for subscription one day after the election results are out. Both good business models entering the market during interesting ‘Guns and Roses’ timings!
The business sentiment needs to be clearly decisive. The hung sentiment would hurt. We have had comparatively decent economic growth despite a decade of news flow that wasn’t consistently positive. India grew despite all that. Imagine what could have been achieved had the environment been more conducive towards taking bolder steps. Indian business must master the art of decoupling its decisions from the overhanging social prejudices and political uncertainties. Easier to say, but there seems to be little choice.