Aiyar emphasises that while exit polls are not always accurate, the market's current euphoria is based on the expectation of stability and continued economic policies

As exit polls indicate a strong likelihood of a third term for the Modi government, the market is buzzing with optimism. According to Swaminathan Aiyar, Consulting Editor at ET Now, the promise of continuity is a key factor driving this positive sentiment.

Aiyar is well-known for his weekly column “Swaminomics” in The Times of India, where he addresses economic and political issues relevant to India and the global stage. Throughout his career, he has prepared numerous reports and papers for the World Bank and served as the India correspondent for The Economist during two periods: 1976–85 and 1990–98. Aiyar often shares his insights on Indian politics and exit polls, providing analysis and commentary before election results are announced. His expertise and perspectives are widely respected in the field of economics and journalism.

Aiyar emphasises that while exit polls are not always accurate, the market’s current euphoria is based on the expectation of stability and continued economic policies. He points out that Modi’s administration has consistently focused on maintaining high growth rates, with India achieving 8.2% GDP growth recently, surpassing both optimistic and pessimistic projections.

Looking back, Modi‘s first term saw significant reforms in financial inclusion, with initiatives like Jan Dhan and UPI. His second term was marked by efforts to make India more self-reliant, despite disruptions from global events like COVID-19 and the Ukraine crisis. Aiyar notes that while some ambitious reforms, such as farm and land acquisition reforms, faced resistance, the overall economic growth and resilience have been impressive.

One standout achievement during Modi’s tenure has been the rise of global capability centres (GCCs) in India. These centres, established by multinational corporations, have significantly bolstered India’s service exports and contributed to the country’s economic stability. Despite a substantial merchandise trade deficit, the growth of GCCs has been a crucial factor in maintaining a positive balance of payments.

Aiyar also discusses the Productivity Linked Incentive (PLI) scheme, which aims to boost manufacturing in India. While the scheme has attracted companies like Apple, its overall impact remains limited so far, with only a fraction of the budgeted funds disbursed.

As the market anticipates Modi’s potential third term, Aiyar advises caution regarding the reliability of exit polls. He suggests that the final election results may differ, urging investors to wait for confirmed outcomes before making decisions.

In conclusion, the market’s optimism stems from the expected continuation of Modi’s economic policies and the growth India has experienced. As the final election results approach, stakeholders remain hopeful yet cautious, recognizing the potential for varied outcomes.