The mutual fund industry seems to be quite pleased with the mandate that the ruling party has received and is optimistic about the positives that political stability would unfold. “On a scale of 1 to 5, with 5 being the best I would rate the verdict as the best. The verdict indicates that the public has now started to realise that political stability is imperative to manage the current economic downturn and bring stability in the economy. Now that the UPA has got almost a majority mandate, government formation will be easier. Now with the mandate given to the ruling party for a second time they will pursue implementation of policies in an aggressive manner. The continuity factor will make many things easier for the government and hopefully there will be more balance in the fiscal and monetary policies. The fiscal stimulus given earlier, hopefully, will see ground level activity especially in terms of infrastructure spending. Some specific sectors like the export-oriented industries, automobile sector and the real estate sector still need more stimulus and with stability returning to the economy there will be positives in store for these sectors. The banking sector should start providing more credit to the cash-strapped corporates. After the budget we can expect the corporate bond market to develop which will make it easier for corporates to generate funds. There will be some change in policies to bring in more foreign investment and more FDI inflows,” said CIO of Birla Sunlife Mutual Fund A Balasubramaniam.

... contd.