India started counting votes for its 2024 general election on Tuesday, with projections indicating that Narendra Modi is likely to secure a rare third consecutive term as Prime Minister.
Exit Polls Predict Strong Victory for BJP
Exit polls released on Saturday showed the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) is set to win an overwhelming majority. According to the NDTV poll of polls, the coalition is expected to secure 365 seats in the lower house of parliament. However, it is important to note that exit poll projections are not always accurate.
The party or coalition that wins at least 272 out of 543 seats will form the government.
Market Reaction to Election Predictions
Markets reacted positively to the exit polls predicting a decisive victory for the BJP. Key stock benchmarks, the Nifty 50 and the Sensex, gained more than 3% and hit record highs on Monday.
- The Nifty 50 closed at 23,263.90 after reaching a record high of 23,338.70.
- The Sensex closed at 76,468.78 after hitting an earlier high of 76,738.89.
The World’s Largest Democratic Exercise
This election was the world’s largest democratic exercise, with almost a billion registered voters. Voting, which began on April 19, was conducted over seven phases spanning more than six weeks.
Economic Growth Under Modi’s Leadership
Under Modi’s 10-year rule, India’s economy has experienced solid growth. The latest GDP data shows the economy expanded by 8.2% in the fiscal year 2024, which ended in March. This growth rate was higher than the government’s initial forecast of 7.6%, maintaining India’s status as the world’s fastest-growing large economy.
“Modi is going to ride that winning horse and focus on India’s growth in ways we have not seen before,” said Samir Kapadia, CEO of India Index and managing principal at Vogel Group.
Infrastructure Development a Key Focus
One of the main priorities for the new government will be boosting infrastructure development. While improvements have been made over the past few years, India’s infrastructure still lags behind that of neighboring China.
“You can’t compare the infrastructure of India to China yet. India will catch up, but they’re not there yet,” said Steve Lawrence, chief investment officer of Balfour Capital Group. However, he added that the two countries can compete in terms of “intellectual horsepower.”
“You have two societies that are hardworking, educated, getting smarter, and understand the diversifications of global markets,” Lawrence told CNBC’s “Street Signs Asia” on Monday.