Decisive mandate for the UPA government
The Congress alliance’s win in last month’s general elections is likely to provide the government much needed political stability and confidence to take bold and consistent reforms towards sustainable economic growth. The 2111 point surge on the Sensex on the first day of opening after the declaration of results was a sign of increased confidence in the government’s ability to deliver on measures for economic recovery. Infosys CEO Mr Gopalan formulated the IT industry hopes by pointing out that the government would need to focus on education reforms and infrastructure and work towards restoring GDP growth back to 8-9 per cent in order to increase job creation. This in turn would generate demands for goods and services leading to a cycle of growth. Amongst rising concerns over negative signals coming from the US on issues such a outsourcing, taxation and H-1B visas, industry heads are also hoping for a tough stance from a strong new government against such measures. It remains to be seen how Mr Manmohan Singh’s new cabinet rises to these challenges.